Carillion to lay-off 1500 staff

9 December 2011

Contractor Carillion has confirmed this week that it plans to axe 1,500 positions in direct response to the government's proposal to half the feed-in tariff rate.  The move comes after the firm put 4,500 people on statutory notice of redundancy last month pending  its redundancy consultation, reported Construction News.

It stated that this latest development comes despite the European Commission saying that the UK government could face legal action over its plans to reduce FiT rates if it is found to threaten progress towards the UK meeting the EU's targets on renewable energy.

Last April Carillion spent £300M buying out solar services firm Eaga in the hope of the profiting form the potential market in installing solar technologies, in light of the government's Green Deal.  As it is, Building reported that Richard Howson, Carillion chief operating officer, confirmed this meant that any future work will be outsourced to local SME's. He also said that the government's decision to halve the feed-in tariff rate means that Carillion would be halting its offer of free installation for housing associations 'in the short and medium term,' reported Building.

And it continues to be grim up north. Manchester Family-owned M&E contractor S Barratt and company, with an annual turnover of £18M, has been placed in administration, with the loss of 43 jobs, reported Construction Enquirer. The firm, established in 1935 had been working on some major UK projects over the years, including the Channel Tunnel, and had recently expanded into working on overseas projects in China and Australia. However, it was reported that the firm had been struggling for several years and had run up losses of £1.26M in 2010. Its increased involvement in solar panel installation projects, affected by the FiT tariff was cited as contributing to the firm's woes.

In brighter news, engineering consultancy WYG is looking to hire new staff, despite operating losses and  drop in turnover in the last quarter of 2011, said Construction Enquirer.  The drive to start employing comes after a two year period that saw WYG shed more than half of its staff during a difficult financial restructuring of the company, and comes as a result off future work in the defence and infrastructure sectors.

Chief executive officer Paul Hamer said 'Whilst trading conditions in the UK remain very challenging, we welcome the government's commitment to additional infrastructure investment in its Autumn statement, which we expect to bring forward some potential opportunities for us,' said Construction Enquirer.

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