22.09.2015

Production cuts at JCB

JCB has announced that it is looking at reducing its headcount in the UK by around 400, following a tough month or two in terms of order intake.

The company blames further drastic slowdowns in some key emerging markets such as Brazil, Russia and China. The company has begun a consultation process with its employees and hopes to keep compulsory redundancies to a minimum.

Chief executive Graeme Macdonald said: “Market conditions in the construction equipment sector have been difficult for some time, but they have worsened quite rapidly in recent weeks. The situation is not about to improve, certainly not in the short term, so we now need to take difficult but decisive actions to align overheads to lower sales forecasts.”

Vertikal Comment

When it comes to revenues JCB has struggled a little in recent years, particularly in Europe, where it has a substantial market share. Its traditionally dominant product line of backhoe loaders is in decline, and its share of the mini excavator market - which have replaced a good number of loader backhoes - is substantially smaller, due to a greater number of well-established competitors in that market.

In the telehandler market it is one of two dominant players both of which are facing a large number of smaller competitors which helping fragment the market. JCB is alone though in that it manufactures its telehandlers in the UK, where the negative effect of a strong pound compared to the Euro has added its own challenges.