Written by: Keith Tully
Reviewed: Tuesday 22nd September, 2015
JCB, one of the world’s leading makers of digging machines and construction equipment, has announced its intention to cut 400 jobs from its British workforce.
The company is to scale back its employment levels in Britain in response to a downturn in demand for its products in a number of important emerging markets, most notably Russia, Brazil and China.
“Market conditions in the construction equipment sector have been difficult for some time, but they have worsened rapidly in recent weeks,” said JCB’s chief executive Graeme Macdonald in a statement.
“The situation is not about to improve, certainly not in the short term, so we now need to take difficult decisive actions to align overheads to lower sales forecasts,” he said.
JCB’s workforce in the UK currently number 6,500, with that figure now set to fall by 400. The Staffordshire-based company also employs 5,500 people elsewhere in the world, with bosses not ruling out further cuts to their workforce in the coming months.
Explaining some of the problems its business currently faces, JCB said that the market for its diggers and construction equipment shrank by 70 per cent in Russia, 36 per cent in Brazil and 47 per cent in China during the first six months of this year.
Meanwhile, growth in JCB’s UK operations has slowed significantly over the past year, with the sharp drop in oil prices blamed in part for a fall in confidence among its customers.
Statements from the GMB workers’ union in response to JCB’s announcements on job cuts suggest that there could more redundancies to come within the UK’s industrial workforces.
“These staff job losses are the first ripple from the downturn in world markets, including China, impacting on the UK economy,” said Gordon Richardson from GMB.
“This huge wave of uncertainty is likely to lead to further job losses in the sectors that trade with the rest of the world,” he added.
In 2013, JCB sold its millionth digger and announced plans to increase the scale of its British workforce by 2,500. The Rochester-based company is the fourth largest maker of diggers in the world.