Coronavirus: 950 JCB jobs at risk as machinery demand falls

JCB had planned to sell and produce more than 100,000 machines this year, but that figure is now 50,000
JCB had planned to sell and produce more than 100,000 machines this year, but that figure is now 50,000

JCB has announced that up to 950 jobs are at risk as the global Covid-19 crisis has resulted in a 50 percent drop in machinery demand.

The British agri-giant wrote to its employees on Friday 15 May warning that hundreds of jobs could face redundancy at its ten UK plants.

A 45-day consultation period will now begin, the company, which hires 6,700 people in the UK, said.

It comes as JCB announced last week a partial re-starting of production at five of its UK factories to 'satisfy the demand' for agricultural machinery.

But news of job losses have been announced as a result of the disruption caused by the coronavirus pandemic, which will see the firm's annual production halved.

JCB said the move to restructure had been extremely tough but that they had no choice but to take the steps to adapt to the post-Covid-19 economic reality.

Chief executive officer, Graeme Macdonald, said: “In 2020 we had planned to sell and produce more than 100,000 machines. With so much global uncertainty, that figure right now is looking more like 50,000 machines.

“In the UK, around 85% 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."

Mr Macdonald said it was 'deeply regrettable' that the firm had to take steps to restructure the business, and that it would have an impact on 'so many people'.

"No business could have anticipated the scale of the Covid-19 crisis and its economic consequences," he said.

“We have 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.”

Staffordshire Chamber of Commerce chief Sarah Williams said the announcement was 'really tragic'.

"It's the tip of the iceberg, we are expecting others companies to face crashes in their markets and reduction in demand, in what is potentially a worldwide recession," she said.

Unite the union's assistant general secretary for manufacturing Steve Turner, said JCB is preparing to throw workers 'under the bus'.

“JCB’s announcement is an indication of a much deeper problem," Mr Turner said, adding that the government must present a clear plan and post-Covid-19 strategy for the UK.