Housing services and construction firm Mears is set to consult with 10% of its 5,000-strong workforce amid a 7.7% slide in revenues.
Mears has warned that as many as 200 jobs may go, as the company forecasts a first-half pre-tax loss of £6m in the six-month period to 30 June.
Social care workers “unaffected”
Mears chief executive David Miles told the PA news agency that the majority of the losses will affect the company’s new homes development businesses and housing management arm.
Miles said its 3,500 social care workers will remain unaffected, and the firm will continue to actively recruit in that area.
The job cuts will come amid a restructuring of the business over the second half of 2020, said Mears, warning that COVID-19 will “inevitably have a lasting impact on the company”.
Mears has also scrapped work on new residential homes in the wake of the lockdown, though it will continue to develop its new social homes.
Commenting on the company’s restructuring, Miles said: “Whilst it has been essential for the group to maintain a sharp focus on short-term operational and financial management, it is pleasing that the group has also taken positive and considered actions during this period to drive improvements.”
Mears said it expects to see an underlying pre-tax loss of around £6m for the six months to 30 June, from profits of £16.7m a year earlier, after revenues fell by 7.7%.
Revenues plunged by 23% to £250m in its maintenance arm alone, though Mears said this fall was partly offset by new asylum accommodation and support contracts.
Mears said the rest of the year will be “particularly important” for contract renewals, with around a third of the group’s maintenance business coming up to be re-bid.
Shares initially fell 4% in the wake of the news but have since rebounded.