Uttoxeter based JCB today announced that up to 950 jobs are at risk of redundancy at its UK plants.
The news comes as the digger maker revealed demand for its machines has fallen by half as a result of the COVID-19 crisis.
The company has written to UK employees today to advise that up to 950 staff roles are under threat at its 10 plants in Staffordshire, Derbyshire and Wrexham and that a 45-day consultation period will begin on Monday.
Around 500 Guidant agency employees, who work at JCB’s UK sites, are also being released from the business.
The job losses have been announced as a result of the severe disruption caused to JCB’s business by the COVID-19 crisis, which will see annual production halved.
JCB CEO Graeme Macdonald today said the decision to restructure JCB’s business had been extremely tough but that the company “had no choice but to take difficult decisions to adapt to this new economic reality”.
He said: “In 2020 we had planned to sell and produce over 100,000 machines. With so much global uncertainty, that figure right now is looking more like 50,000 machines.
"In the UK, around 85 per cent of everything we manufacture is exported and our UK factories will now produce machines at half the rate we had planned just a few months ago.
"As a result, we have no choice but to align our cost base to demand for the rest of the year.
“It is deeply regrettable that we have had to take these steps to restructure the business and that it will have an impact on so many people.
"No business could have anticipated the scale of the COVID-19 crisis and its economic consequences.
"JCB has had to act quickly for the long-term survival of the business, which has been at the heart of our decision-making throughout this difficult period.”
JCB currently employs around 6,700 people in the UK, including agency employees.
A 45-day consultation over the proposed JCB job losses will begin on Monday, May 18th, when discussions with staff representatives will start.
The vast majority of JCB’s employees are currently furloughed until the end of May after production at UK factories stopped in March in the wake of the COVID-19 crisis.
Mr Macdonald added: “The Government’s taxpayer-funded Job Retention Scheme, which was a temporary measure that has seen most UK employees furloughed since the beginning of April, was never going to be capable of sustaining employment at companies having to face such reduced levels of demand.”
Staffordshire County Council leader, Philip Atkins, said: “JCB is one of Staffordshire’s flagship companies and one of our major employers. This news is devastating for all employees concerned and their families. While we await the detail, we will do all we can, working with our partners such as Jobcentre Plus, the local enterprise partnership and our district and borough councils to ensure all the support is there at this difficult time. We recently set up our redundancy and recruitment triage service to help get people back into work or gain new skills as quickly as possible.
“The impact of coronavirus in such a short time on our businesses and communities is unprecedented. Businesses are having to make incredibly difficult decisions to maintain their long-term sustainability. Our priority as a county council is to protect and support our residents and businesses. We’re urging people to contact the Stoke-on-Trent and Staffordshire Growth Hub for more information.”
Stoke-on-Trent and Staffordshire Local Enterprise Partnership chairman, Alun Rogers, said: “Our priority at the LEP is to support our businesses and communities. This is dreadful news for those employees affected and their families and they can be assured we will do all we can to support them at this difficult time.
“Since the current crisis started, we have been working hard with our partners to put in place support initiatives such as our redundancy and recruitment triage service as well as signposting people to central government and local authority schemes.
“We know that businesses across sectors are struggling through this time, however these announcements still come as a shock to everyone affected. We would like to assure people that our task force is planning our recovery from this crisis and that we are here to respond to concerns from employees and businesses.”