A major Scottish housebuilder with three Tayside developments has started a consultation process with its workforce.
Stewart Milne Group is merging its two homes divisions in Scotland with up to 80 jobs under threat of redundancy.
The group currently has three developments in Tayside:
- Monarch’s Rise, Arbroath
- Ballumbie Rise, Dundee
- Hunter’s Meadow, Auchterarder
Stewart Milne Homes North and Stewart Milne Homes Central will become one unified business – Stewart Milne Homes Scotland.
The redundancies will affect staff in Aberdeen, Glasgow and Manchester and not its Tayside workforce.
‘Not a decision we have taken lightly’
Stuart MacGregor, chief executive of Stewart Milne Group, said: “Over the last nine months, we have been developing new design standards, products and accelerated build programmes and investing in digitalisation that will make us more competitive.
“Our recent annual business plan process assessed the likely market demand in each of the housing markets in which we operate.
“As a result of this, we are combining our Scottish operations to ensure we have the right resources in the right places and can leverage the benefits of our newly developed consistent ways of working and standards of excellence in design, build and marketing.
“Regrettably, our restructure will impact on jobs and we are embarking on a consultation process which will put 60 – 80 posts at risk of redundancy in Aberdeen, Glasgow and Manchester from a total of almost 1,000.
“This is not a decision we have taken lightly, but one based on what is best for the longer-term future of the business, protecting the majority of jobs and ensuring we are better positioned for growth in the next five years.
“We fully appreciate that this is a painful process given the current economic climate where many more people are also facing uncertainty.
“We are committed to managing the process as efficiently, fairly and transparently as possible.”
Strong sales in Tayside
The Covid-19-imposed restrictions have resulted in the loss of nearly three months of trading which has inevitably impacted on financial performance.
Since coming out of lockdown, however, Stewart Milne Group has reported strong sales performance across Scotland and North West England, particularly in Tayside, the Central Belt of Scotland and popular commuter areas in North West England.
Although sales in Aberdeenshire have improved post-lockdown, the group says this market remains more challenging due to a historic over-supply of properties and a significant drop in house prices as a result of almost six years of an oil and gas downturn.
During lockdown, when there was no housebuilding or manufacturing, Stewart Milne Group furloughed 795 employees.
Since the market re-opened, almost all these employees have returned to work and the group currently employs almost 960 people.
Spike in housing activity
Mr MacGregor added: “The UK housing market is currently experiencing a short-term spike in activity and our forward sales position for 2021 is very strong.
“However, the group board has a responsibility to look further ahead and plan for the economic position we anticipate in the next few years.
“Although most areas of Scotland, and all of England, are currently subject to Covid-related restrictions, these do not affect our construction and manufacturing operations in the same way as they did earlier this year.
“It would therefore be wrong for us to make further use of the furlough scheme at this time when our restructure is not directly related to the current restrictions but rather to meet our longer-term activities.”
Stewart Milne Group’s timber systems business, which design and manufactures timberframes for off-site construction, continues to perform strongly and its workforce of almost 400 people, in Aberdeen and Witney, is not affected by this restructure.
Jonathan Fair, currently managing director of Stewart Milne Homes Central, will head up the combined division with Neil Thomson, regional director for Stewart Milne Homes North, becoming deputy managing director.