375 positions are at risk at Ibstock, the Leicestershire-based manufacturer of clay bricks and concrete products – approximately 15% of its total workforce.
In a trading update for the five months ended 31 May 2020, the company noted that sales volumes during the first 10 weeks of the year were “modestly below the comparative period as [it] entered 2020 against the backdrop of more subdued market conditions.”
The group saw a sharp decline in sales volumes from late March as the Government measures to control the COVID-19 pandemic began to take effect and the firm’s construction and housebuilding customers closed sites.
During April, volumes in Ibstock’s Clay division fell by around 90% year on year, though the Concrete division remained relatively more resilient during that period.
As the construction and housebuilding sectors have begun to return to work over recent weeks, Ibstock has noted that trading conditions have started to improve, with a modest recovery in clay brick sales, although volumes currently remain around 70% below the comparative period, and concrete volumes now at around 50% of those from the same period in 2019.
Overall, Group revenues for the three months to 31 March 2020 were down by approximately 10% compared to the comparative period, with a decline of around 75% in the two months to 31 May 2020.
While the business has taken action to address COVID-19 challenges, with measures including utilising the Government’s Coronavirus Job Retention Scheme, reducing discretionary spend wherever possible and implementing a temporary salary reduction for the Board and the executive leadership team, in order to ensure that the business remains well-positioned as it emerges from the current crisis, it is conducting a review of all operations.
Ibstock said: “This review is 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.
“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.
“Whilst the changes anticipated will ensure our business is adapted to the near-term industry demand outlook, we retain the flexibility to scale production back up, as and when demand recovers.”