UK’s largest brickmaker, Ibstock, says it has entered in to consultation with 15% of its workforce due to low demand
The UK’s largest brick maker, Ibstock, has announced plans to lay off up to 375 staff to cope with lower demand in the wake of the coronavirus crisis.
The firm said in a trading update to the city today that it had entered into consultation with staff representing about around 15% of its workforce as part of a review of all operations which it expected to lead it to close factories.
The statement said it had begun the review because while the volume of brick sales had begun to recover from the lows experienced during lockdown, sales were still around 70% lower than this period last year.
It said it had so far restarted production at only a third of its manufacturing sites, in response to the demand it had seen. The health of brickmakers is seen as a clear indicator of expected demand in the residential construction market.
The decision to restructure comes despite Ibstock furloughing a significant portion of its staff under the government’s Coronavirus Job Retention Scheme and cutting salaries of the board and executive team.
The update said that “in order to ensure that the business remains well-positioned” after lockdown, it was “conducting a review of all operations” which it “expected to lead to a material reduction in the group’s fixed cost base, through selective site closures, changes in operating patterns and changes to the size and structure of support functions.”
It added: “We have entered into consultations with employees across the group as part of a series of restructuring proposals, with up to 375 positions, representing around 15 per cent of the group’s total workforce, potentially impacted as a result of these actions.”
The changes, it said, would ensure the business was “adapted to the near-term industry demand outlook”.
The announcement comes following forecasts from the Construction Products Association that residential construction work will fall by 42% in 2020, and only partially recover next year. While estate agents are currently reporting strong demand for homes, there is also evidence that anything up to two in five home buyers have decided to delay their purchase due to the covid crisis.
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