JCB to cut jobs after decline in demand for machines

JCB has announced that up to 950 jobs are at risk of redundancy in the UK after demand for its machines fell by half as a result of the Covid-19 crisis.

The manufacturing giant has written to employees 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.

500 Guidant agency employees, who work at JCB’s UK sites, are also being released from the business.

JCB said the job losses are a result of the ‘severe disruption’ caused to the business by the pandemic, which is set to see annual production halved.

JCB CEO Graeme Macdonald described the decision as being “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. The vast majority of staff are currently furloughed until the end of May after production at UK factories stopped in March.

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.”