A “rapid deterioration in world construction equipment markets” is being blamed for up to 400 proposed redundancies at UK-based manufacturer JCB.
It has started a consultation process with staff over the proposed redundancies, saying that a slowdown in recent weeks has been marked, particularly in the emerging markets, resulting in a sharp fall in machine orders.
JCB has briefed employees that up to 400 staff positions were now at risk in the UK, although it said it would attempt to minimise the impact by considering voluntary redundancies.
CEO Graeme Macdonald said, “Market conditions in the construction equipment sector have been difficult for some time, but they have worsened quite rapidly in recent weeks.
“The situation is not about to improve, certainly not in the short term, so we now need to take difficult but decisive actions to align overheads to lower sales forecasts. Regrettably, this will result in up to 400 staff positions becoming redundant across our UK businesses.”
The company said that in the first six months of the year, the market in Russia had dropped by 70%, Brazil by 36% and China by 47%. Parts of Europe were also struggling, it said, with France down by 26%.
It added that even the strong growth in the UK and North America had softened as a result of a fall in market confidence over the summer, which had been prompted to an extent by low oil and commodity prices in countries which depended on these resources to drive economic growth.
In May, JCB – which is based in Staffordshire in the English Midlands – reported earnings before interest, tax, depreciation and amortization (EBITDA) for 2014 of £303 million (€419.22 million), a slight fall on 2013’s figure of £313 million (€433.06 million).