As the fall-out from the Carillion collapse continues, the UK saw more construction lay-offs this week with the closure of a business unit of the outsourcing giant, Interserve, and four companies of the Lagan Construction group entering administration.
Interserve will be shutting down its specialist power contracting business in Wakefield to streamline the business, cutting 70 jobs, while the closure of the Lagan companies is expected to make 200 positions redundant.
The bad news came after the UK’s Official receiver said on Monday (19 February) that a further 152 staff of the collapsed giant Carillion were to be made redundant, bringing the tally of Carillion lay-offs so far to 1,141.
The Lagan companies are closing because the business had been "significantly impacted" by delays and disputes involving several of its projects, according to a memo seen by the BBC.
Twenty-six other Lagan companies continue to trade. The four closed companies are Lagan Construction Group Holdings Limited, Lagan Construction Group Limited, Lagan Building Contractors Limited and Lagan Water Limited.
The group’s boss, Michael Lagan, said in the memo to staff: "The difficulties which have arisen within the Civils and Building divisions has meant that the directors of the affected four companies have no option but to immediately serve notice on the court to appoint an administrator.
"It is with great sadness and reluctance that the group had to take this course of action.
"Up to 200 employees may be affected by this announcement.
"I hope that some of those jobs could be transferred to joint venture partners whilst others may be relocated to divisions within the group."
The closure of Interserve’s Wakefield power business comes as the construction and services giant works to bring debts of £513m under control.
As Carillion was, Interserve is a major supplier of construction and outsourcing services to the UK government.
Last month The Financial Times reported that the UK Cabinet Office had set up a team of officials to monitor the company over concerns for its financial health, although the government subsequently insisted it did not see Interserve’s situation as directly comparable to Carillion’s.
Staff at the power business, which undertook specialist work in pylon, underground cable and substations, were told of the decision yesterday, reports Construction Enquirer.
A major source of Interserve’s difficulties are losses on a waste-to-energy contract in Glasgow.
Last month its chief executive Debbie White said the company would trim up to £50m from running costs in its ongoing effort to "stabilise the business".
Interserve employs around 80,000 people worldwide. Last month it won a £10m services deal with Spanish airport handling provider, Groundforce.
Image by Interserve depicts activities in its power and utilities businesses