Redundancies announced as global downturn hits JCB

JCB have this week announced a redundancy programme in response to a rapid decline in orders which, they say, has resulted in a 20% reduction in their forecast production schedule for the remainder of this year.

It is anticipated that this programme, which is being undertaken to align overhead costs with the reduced production volumes, will result in the loss of approximately 500 manufacturing positions across JCB factories throughout the UK.

A proportional number of staff positions are also expected to be made redundant as part of this programme, although the company says exact details have yet to be finalized.

Commenting on the announcement, JCB group chief executive officer Matthew Taylor said: ‘Our products are used mostly in the construction sector, which has been badly affected by the global credit crisis and rising raw material costs.

‘Many JCB dealers around the world are experiencing lower sales rates because of reduced customer activity, mainly in the house building and commercial property sectors, and this has a direct impact on our machine build programme.’

Mr Taylor added: ‘Some emerging markets, such as Russia, Brazil and the Middle East, continue to grow and the agricultural sector remains quite strong, but this is only partially offsetting the impact of the downturn in the construction sector, particularly in more developed markets.

‘These job losses are regrettable but absolutely necessary to ensure that JCB remain competitive and well positioned to benefit from any market upturn. However, we do not expect to see a recovery until late 2009 at the earliest.’

JCB have entered into the required consultation processes with the GMB trade union and staff representatives for each of the individual business units affected by these measures. Voluntary redundancies will be considered as part of this programme and a comprehensive counselling service will be available to employees who are at risk of redundancy.