Johnson Service Group confirms workforce cut as pandemic hits demand

Workwear and textile firm Johnson Service Group has confirmed more than 1,500 roles have been cut as the coronavirus pandemic batters demand in its key hotels and catering markets.

The group said it expects its workforce in the division serving the hotels, catering and restaurant division to end the year around 1,350 lower at 2,450 by the start of 2021, while around 200 roles have also been cut in its workwear arm.

It is shutting its workwear site in Newmarket, leaving the group with 16 processing sites across the division.

Johnson said the reduction in its workforce had been made through redundancies and natural staff turnover.

It comes as Johnson has warned over the impact of the second national lockdown in England on its division serving the hard-hit hospitality sector.

Following a brief sign of recovery in September, sales volumes in the division slumped back to 45% of normal levels in October as local restrictions hit demand, according to the group.

“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.

Workwear demand – serving industrial and food processing customers – has proved more resilient, with sales volumes slightly ahead of pre-Covid-19 levels by the end of October.

But Johnson cautioned over the division’s ability to grow revenues given fewer new contracts and ongoing uncertainty for clients.

It expects to start 2021 with 2,100 workwear employees, down from 2,300 at the end of 2019.

Johnson said: “As a result of the increased spare capacity we have created at nearby workwear sites, we have announced the closure of our Newmarket site, which is one of our smaller workwear sites and our only mixed economy facility.

“Work is currently in the process of being transferred to neighbouring sites.”

Johnson currently has some 1,600 employees in the hospitality division on furlough, with the majority of those remaining being semi-furloughed on reduced working hours.

Peter Egan, chief executive of Johnson Service, said: “We have taken the right steps to manage our cost base and maintain a firm foundation for Johnson Service Group, with the strength of balance sheet and flexibility of resources and operations to provide for future strong returns when the recovery emerges.”