Scots workers hit as Jarvis axes jobs

FINANCIAL woes at Jarvis, once Britain's largest construction company, have claimed the jobs of more than 100 workers in Glasgow.

The Scottish job losses are among 1,100 redundancies announced yesterday by Deloitte, which was appointed administrator to Jarvis last week. They include 96 workers at the Jarvis Rail engineering operation in Shettleston, plus a further six staff elsewhere in Glasgow.

The redundancies, which take effect immediately, mean that Jarvis has shed more than half its 2,000 workers across the UK. The affected businesses include Jarvis plc, Jarvis Rail and Fastline rail repair operations at other sites in Doncaster, Leeds, Newcastle and Peterborough, as well as staff at the company's headquarters in York.

Deloitte said it was not possible for Jarvis to continue trading without further funding. But support failed to materialise despite meetings earlier this week with Network Rail, the government-backed rail infrastructure owner which accounted for about two-thirds of Jarvis's turnover.

Administrators asked Network Rail on Tuesday for affirmation that Jarvis's existing contracts would continue, but no such assurances were forthcoming.

"After reviewing the business, and conducting negotiations with key stakeholders, the administrators have concluded that it is not possible to continue to trade the business in the absence of further funding," Deloitte said in a statement yesterday.

"It has regrettably, therefore, been necessary to make some 1,100 redundancies across the three companies today."

The company, chaired by former Conservative transport minister Steven Norris, was once valued at 1 billion but was brought low through years of over-ambitious expansion, controversial accounting practices and its part in the Potters Bar rail crash. It came close to collapse in 2004, but narrowly avoided bankruptcy through a 378 million debt-for-equity swap.

More recently, Jarvis struggled as Network Rail slowed the pace of its five-year, 35bn railway improvement programme. Jarvis had hoped to claw its way back to recovery by reducing its reliance on its main client, but was forced to concede last month that it would make an operating loss of about 5m for the financial year that ended on 31 March.

Deloitte said yesterday that Jarvis Accommodation Services, the facilities management part of the group, was continuing to trade amid the search for a buyer.

"The administrators are working closely with all stakeholders to continue a normal level of service while they seek a buyer for the business as a going concern," the statement said. "The administrators have already received a significant amount of interest in this company."