A Dundee student accommodation provider has made a redundancy warning.
Mears Group owns the Old Mill on Brown Street, which houses around 400 students. It operates the A-listed former Dundee jute mill under its Student Life Mears brand.
As well as housing services, Mearns provides social care operates a construction division.
The group today warned it is set to consult with up to 10% of its 5,000-strong workforce amid an overhaul as it expects to slide to a first-half loss.
Mears said the cuts would come as part of a restructuring of the business over the second half of 2020 as it warned that Covid-19 will “inevitably have a lasting impact on the company”.
It has mothballed residential new homes construction work amid the lockdown, though its work on new social homes has remained unaffected.
Chief executive David Miles said: “Whilst Covid-19 will inevitably have a lasting impact on the company, it has allowed Mears to adopt new innovative ways of working which enable more remote working and greater use of hubs to coordinate services across several branches.
“Action has been taken to exit contracts which, both pre and during Covid, the Group has identified as not fitting the criteria key to Mears way of working.
“As such, the Group will be completing restructuring through the second half year that will lead to some reduction in staff numbers.
“These developments are not wholly a result of Covid but also through the ongoing drive for continuous improvement and ensuring the Group’s longer term success.”
Fewer than 200 jobs are expected to go in the listed company. The bulk of the losses will affect the company’s new homes development businesses and housing management arm.
But its 3,500 social care workers will remain unaffected, with the firm recruiting in that sector.
Mears invested heavily in its Dundee operation to the tune of £3 million in the summer of 2017.
There is a total of 409 bedrooms available in the building, ranging from studio to six-bedroom flats. Residents have access to communal facilities such as a common room, vending machines, pool table and ping-pong.
In May, Mears was criticised for charging students who had travelled home to live with their families when campuses shut and lockdown began.
Josh Connor, Dundee University’s student president called on Mears to show “some flexibility and compassion”.
But the firm said it expected people to honour their contracts.
Mears said it is set to swing to an underlying pre-tax loss of around £6 million for the six months to June 30 from profits of £16.7 million a year earlier after seeing revenues slide 7.7%.
