Jedburgh’s Mainetti clothes-hanger factory is set to lay off more than a seventh of its 360-plus workforce.
Those 51 pending job losses have been prompted by expected losses of almost £1.2m over two years due to a slump in demand for hangers caused by the troubles facing the UK’s high street clothing retailers.
Bosses at the Oxnam Road factory had attempted to safeguard jobs there by transferring work from its Morocco operation, but even that failed to stop its output falling by more than a eighth over this year and last.
In a letter issued to staff and councillors at the weekend, the company’s regional managing director, Jim Hutchison, says: “The last two years have been difficult for the business.
“In 2017, Mainetti UK made a loss of £561,000, and this year we are forecast to lose a further £600,000.
“The business is faced with an ever-increasing cost base, with increases to the national minimum wage, higher electricity costs and higher business rates.
“To add to these cost pressures, the business is seeing local UK demand for hangers reducing.
“Many retailers are closing down shops or reducing their selling space, and this means there are less hangers required.
“In addition, an increased emphasis on recycling means more hangers are being returned from stores for re-sorting, which further reduces manufacturing demand.”
“We have supported the UK manufacturing business by moving some production from Morocco to Jedburgh, but even with this additional work, UK manufactured volumes have dropped from 106 million to 90 million – a 15% decline – over the two-year period.
“Without that support, this drop would have been even greater.
“The directors are aware that this announcement comes at a difficult time of year but felt it was better to announce this now so staff knew what was being proposed so they could plan ahead accordingly.”
The company is hoping tokeep compulsory redundancies to a minimum, it says, but fears some will be inevitable as it looks to reduce its 364-strong staff to 313 as part of a cost-cutting restructure.
It is currently in talks with workers and officials at the union Unite over the forthcoming job losses.
Staff producing its Seatcase children’s luggage and Glastic plastic beer and wine glasses will be unaffected.
“The business needs to rebalance its output to match current demand, so it needs to restructure the Jedburgh manufacturing operation,” said Mr Hutchison.
“The company is proposing to reduce headcount and sell excess machinery to other Mainetti Group companies that have a requirement for this equipment.
“The company will be seeking voluntary redundancies from across the Jedburgh site, but it is likely that there will be some compulsory redundancies.
“We expect to reduce headcount by around 51 people.
“Following these changes, we will still employ 313 staff.
“These changes will only impact on the Jedburgh hanger manufacturing unit.
“All other products made in Jedburgh – flower buckets, polythene bags, Glastic and the Seatcase will not be impacted on and, in fact, the company will continue to invest in all these areas during 2019 in order to grow those parts of our Jedburgh manufacturing business.”
Berwickshire, Roxburgh and Selkirk MP John Lamont said the job losses announced, coming two weeks before Christmas, would be a big blow for the staff facing the axe.
“This is disappointing news from a long-standing employer in Jedburgh,” he said.
“Clearly their market is changing, and Mainetti are having to adapt to that.
“People are recycling hangers more and buying clothes online, meaning demand is falling.
“Even with these changes, more than 300 good jobs will still be based in Jedburgh, but it is nevertheless a big blow to be losing 50 in the town, particularly as the news has come so close to Christmas.
“I discussed this with senior management over the last few days, and they have assured me that this process will be done gradually and in consultation with staff.
“The company will be looking to restructure via voluntary redundancies as far as possible.”
Ettrick, Roxburgh and Berwickshire MSP Rachael Hamilton said: “This is worrying news emerging from Mainetti in Jedburgh, especially in the run-up to Christmas.
“The loss of 50 jobs is a huge hit for Jedburgh and the wider area, and I will be contacting Mainetti in the coming days to discuss what can be done to ensure that job losses are kept to a minimum.”
Jim Brown, one of the town’s three councillors, said: “I am very disappointed and understand it will be devastating for the families involved, especially at this time of year.
“However announcing the impending bad news pre-Christmas could possibly avoid families making any seasonal long-term financial decisions until they know exactly who will be affected.
“Let’s hope that, so far as possible, voluntary redundancies can found in order to limit the effect on young families.”
Fellow councillor Scott Hamilton added: “The news from Mainetti is very stressful for those employed there and the town of Jedburgh.
“Redundancies are never good. However, at this time of year it only adds to the uncertainty for the community.
“It is important to note the commitment Mainetti has made to Jedburgh over the years, and I will be working hard with partners to make sure the effects can be minimised as much as possible.
“My heart goes out to those affected by this.”
Unite regional officer Mark Lyon said: “The loss of any jobs in such a small rural community is a blow.
“Unite will work with the company to try to mitigate the job losses, such as seeking voluntary redundancy options and looking at the potential for diversification that will retain these jobs at the site.”
“Unite will work with Mainetti management to consider other options including seeking input from Scottish Enterprise to provide support to the company, as well as the possibility of providing assistance with the rise in energy costs that are impacting on the business.”