500 jobs to go as sales slump hits Renishaw

The group, which has some operations in Scotland, has experienced an "unprecedented" slowdown in demand for its products in recent months, forcing it to take action to cut costs.

Renishaw, which employs 2,240 people around the world, said most of its 1,500-strong UK workforce was based at four Gloucestershire sites.

Staff at the firm, which specialises in the design, manufacture and sale of measurement equipment, were asked last month to work a four-day week to cut costs.

Despite the move, the group, which has its headquarters in Wotton-under-Edge, Gloucestershire, experienced an operating loss in both January and February as sales declined.

Management now predicts an operating loss of 10 million for the second half of the group's financial year.

Chairman and chief executive Sir David McMurtry said yesterday: "It is with great personal regret that, due to the exceptional and unprecedented global recession in which we find ourselves, we have to impose this process on our employees who have always shown great loyalty and dedication to the group."

Renishaw supplies products to a range of industries, with its technology used to help assemble vehicles at the JCB factory in Staffordshire.

It has also branched out from its core engineering focus to medical and dental technology, recently releasing software for designing dental crowns and bridges.

But sales have been particularly hit by falling demand from suffering industries such as the automotive sector, which Renishaw believes is unlikely to recover soon.

Renishaw has UK bases at Stonehouse, Wotton-under-Edge – where it has two sites – and Woodchester in Gloucestershire, as well as in Exeter, Glasgow, Edinburgh and Alnwick.