JCB warns 950 jobs at risk due to coronavirus causing a slump in demand
HEAVY machinery giant JCB has warned that up to 950 jobs are at risk of redundancy at its UK plants.
It comes after demand for its products dropped by half as a result of the coronavirus crisis, the company announced today.
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JCB is the latest firm to issue a jobs warning, with , British Airways and P&O Ferries announcing similar cost-cutting measures.
A letter has been sent to JCB employees today, May 15, explaining that jobs are under threat at its 10 plants in Staffordshire, Derbyshire and Wrexham.
There will now be a 45-day consultation period, starting on Monday, May 18.
Around 500 Guidant agency employees, who work at JCB's UK sites, are also being let go from the business.
Businesses in turmoil in 2019 and 2020
JCB is the latest in a long list of businesses to be facing trouble.
In 2019 and so far in 2020 we've seen:
- Jamie Oliver's "Jamie's Italian"chain go bust, alongside his Fifteen and Barbecoa restaurants
- Links of London go into administration putting 350 jobs at risk
- Marks and Spencer close 35 more stores as it pushes forward with plans to axe 145 shops across the UK
- Dozens of Monsoon and Accessorize stores close
- Struggling shoe shop Office has said it "could close shops" as part of restructuring plans
- Fears Pizza Express could be next to go into administration as it "brings in emergency advisers"
- Hairdressing chain Supercuts went into administration in October 2019 putting 1,200 jobs and 220 salons at risk
- Maternity and baby retailer Mothercare collapsed into administration in November 2019 after 58 years on the high street, putting 2,500 jobs at risk
- Department store chain Beales went into administration in January 2020 with 23 shops and 1,052 jobs at risk
- High end fashion brand Ted Baker said it plans to axe 160 jobs in February 2020
- Mobile phone retailer Carphone Warehouse said in March 2020 that it'll close all 531 standalone stores in April
- Vintage furnishing and fashion firm Cath Kidston said it was closing all 60 high street stores in March 2020
- Fashion store Animal said in April 2020 it was closing all 21 of its UK stores
- Department store chain Debenhams fell into administration for the second time in April 2020
- P&O Ferries said in May 2020 that it was looking at making 1,100 workers redundant
- TUI warned in May 2020 that 8,000 jobs could be cut due to the ongoing coronavirus crisis
- British Airways said in May 2020 that it still plans on pressing ahead with 12,000 job cuts
JCB said the announcement follows severe disruption caused by Covid-19.
The company currently employs around 6,700 people in the UK, including agency employees.
The majority of these workers have been furloughed since April.
This is where the government covers 80 per cent of the wages of staff who are unable to work due to the coronavirus crisis.
Chief executive Graeme Macdonald said the decision had been extremely tough but the firm "had no choice but to take difficult decisions to adapt to this new economic reality".
Mr Macdonald explained how the company had planned to sell and produce over 100,000 machines in 2020.
This figure is now estimated to fall to 50,000 machines, he said.
In March this year, JCB had announced plans to use its factory in Uttoxeter to build life-saving ventilators to boost the NHS.
Factory work was temporarily suspending on March 18, with 400 members of staff returning just this week.
Workers were seen wearing gloves, face masks and visors, as well as maintaining social distancing.
Mr Macdonald added: "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.
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"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."