Workwear and textiles group confirms more than 1,500 job cuts

Lucy Harley-McKeown
·2-min read
The group, which supplies the hospitality industry, has been particularly hard-hit by COVID-19 lockdowns. Photo: Paul Bersebach/MediaNews Group/Orange County Register via Getty Images
The group, which supplies the hospitality industry, has been particularly hard-hit by COVID-19 lockdowns. Photo: Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Workwear and textiles firm Johnson Service Group (JSG.L) said on Tuesday it would cut more than 1,500 roles, as the pandemic continues to hit hospitality and catering markets hard.

The group told the Press Association (PA) its division serving catering and restaurants would prune around 1,350 to 2,450 jobs by the start of 2021, while about 200 roles are on the block in its workwear arm.

It is also due to shut its workwear site in Newmarket, PA reported, one of 17 processing sites across the division.

The company said it would cut its workforce through redundancies and natural staff turnover, while warning on the impact of a second lockdown in England on the division serving the hospitality sector.

The move comes despite the government extending its furlough support to businesses until the end of March 2021.

The company said in a trading statement: “Whilst Workwear volumes overall have recovered to the levels seen in February, there is an expectation that the lower level of new sales signed during the national lockdown, the increased uncertainty for many of our industrial customers and the potential for further lockdowns, on either a regional or national basis, will restrict the division's ability to achieve organic revenue growth in the short term.”

The group’s stock price was holding steady on the news by mid-morning in London.

READ MORE: UK consumer spending slowed even before new lockdowns

The group had experienced a brief recovery in September, but sales volumes slumped back to 45% of normal levels in October while bars and restaurants grappled with targeted government lockdown measures.

“Whilst the news last week of a possible vaccine is encouraging, volumes currently remain unpredictable and the timing of any sustained recovery in our market remains unknown,” the group said.

Peter Egan, CEO of JSG, said: "We have taken the right steps to manage our cost base and maintain a firm foundation for JSG, with the strength of balance sheet and flexibility of resources and operations to provide for future strong returns when the recovery emerges."

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