Warning of an industry in crisis as 95 jobs are to go at Sheffield Forgemasters

Sheffield Forgemasters have confirmed they are consulting on 95 redundancies as the Covid-19 pandemic immobilises global markets.

Management at the company said that cuts to the 708 strong workforce are an 'unavoidable necessity' in the current economic climate, but they remain optimistic about the long-term future of the business, which is a key supplier to the UK defence industry.

This announcement of 95 job cuts at Sheffield Forgemasters follows the report earlier this week of 70 job cuts at Outokumpu’s Sheffield operations and highlights the precarious position of the British steel industry.

The redundancies will affect staff across all levels of the business in response to a rapid reduction in throughput of products for steel processing, offshore oil and gas and power generation sectors, as customers across the world battle with the effects of the pandemic.

David Bond, chief executive officer at Sheffield Forgemasters, said: "The decision to make redundancies has been extremely difficult for us, but staff cuts have become an unavoidable necessity in order to protect the majority of jobs at Sheffield Forgemasters.

"Although our defence work remains unaffected, we have seen a significant downturn for commercial work driven by the pandemic, leaving many areas of our plant well below capacity. Over the short-term, this poses significant operational challenges, which have to be met."

Under normal trading conditions, commercial contracts make up the majority of Sheffield Forgemasters' throughput in terms of tonnage, alongside core defence work for the UK and US defence industries.

Mr Bond added: “We are hopeful that the 95 projected redundancies can be reduced through voluntary redundancy or via internal re-deployment. Many highly skilled positions within the business will be protected and our apprentices training programme will continue, ensuring succession.

"The company is already in the process of up-skilling 350 employees through an agile working initiative as part of our transformation programme to allow for maximum operational flexibility.

"This will deliver a better trained, multi-skilled workforce operating across the site, with less reliance on fixed departmental teams which will improve productivity and allow us to make more competitive offerings to our customers.”

Sheffield Forgemasters recently posted its financial results for 2019, indicating a year of consolidation, with a pre-tax profit of £0.8m, down from £2m in 2018 but showing a reduction in debt from £20.3m to £8.8m over the year.

Mr Bond said: “After a year of consolidation, creating further efficiencies has become more pressing, and the business needs to become much more competitive as we seek to regain commercial contracts within highly contested markets.

"We continue working closely with our largest customers to secure future revenue from our position in the UK defence supply chain and we are seeking out emerging market opportunities in support of the Government's net-zero carbon agenda, including offshore wind-power and the development of Small Modular Reactors for civil nuclear power.

"We have financial security through to 2022 via our defence commitments, with an exceptional workforce and a highly experienced board of directors collectively working together to weather the current economic downturn."

Responding to the announcement that Sheffield Forgemasters proposes to make 95 redundancies due to reduced demand caused by the pandemic, Roy Rickhuss, General Secretary of Community for the Steel union, said: "Clearly this is extremely worrying news for the workforce and their families, and we are engaging with the company to understand their plans and examine any alternatives that could save jobs."

Mr Rickhuss added the Government must take these distressing developments as a "wake-up call" and more must be done to support the steel industry though this crisis so it can "survive and then thrive," playing a central role in rebuilding the economy.

He said: "As a top priority government must press on with major infrastructure investments and take decisive game-changing action to ensure that taxpayer-funded projects like HS2 and offshore wind support British jobs and British industry.

"Sourcing steel locally will be vital to delivering our climate change objectives whilst sustaining strategic supply chains and industrial communities across the UK. The industry can have a bright future but delivering that will require political will and the right framework of government support."

____________________________

Support The Yorkshire Post and become a subscriber today.Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers.

So, please - if you can - pay for our work. Just £5 per month is the starting point. If you think that which we are trying to achieve is worth more, you can pay us what you think we are worth. By doing so, you will be investing in something that is becoming increasingly rare. Independent journalism that cares less about right and left and more about right and wrong. Journalism you can trust.

Thank you

James Mitchinson