JCB Cuts U.K. Jobs

July 21, 2008 • As a response to a rapid decline in orders for new equipment, JCB has announced it will lay off 500 manufacturing jobs in its factories in the United Kingdom, according to the Financial Times. In addition to manufacturing jobs, a number of staff positions are expected to be laid off, but exact numbers have not been publicized. Voluntary redundancies also will be considered as part of the program. The news comes only two months after the company reported that 2007 was the most successful year in its 62-year history.

 

“Our products are used mostly in the construction sector, which has been badly affected by the global credit crisis and rising raw material costs,” said Matthew Taylor, JCB's group chief executive officer. “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 program.” The sales slump has resulted in a 20-percent reduction in JCB's forecast production schedule for the rest of the year.

 

While emerging markets, such as Russia, Brazil, and the Middle East, have continued to grow and the agricultural sector remains strong, Taylor said 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 remains competitive and well-positioned to benefit from any market upturn,” he added. “However, we do not expect to see a recovery until late 2009 at the earliest.”