Heidelberg consults on UK restructuring plans
Wednesday, June 3, 2020
Heidelberg is consulting with its UK workforce about a proposed 20% reduction in headcount along with changes to employees’ terms and conditions.
UK entity Heidelberg Graphic Equipment has sent a letter to employees outlining the situation, because it was not practical to convene staff meetings at the present time due to Covid-19 restrictions.
The firm said it had experienced “a sustained and material decline in business” due to industry consolidation, that had been exacerbated by the pandemic.
“To compound this we currently face the global Corona crisis, where the UK has been one of the worst affected regions and the impact on the print media industry has been significant to date. This is set to further accelerate the downward trend in our business,” the business said in a joint letter from managing director Ryan Miles and HR manager Hannah Awan.
“As a result of the above, and despite recent material reductions to our senior management / board of directors, there is a reduced demand for employees and managers within our business, and there is a need to restructure our organisation in order to remain sustainable on an ongoing basis,” they said.
The plans include reducing headcount by around 20% – or around 40 roles – across sales, service and back office functions.
Miles told Printweek that the firm was determined to do the best it could for employees in a difficult situation.
“The human side is more important than anything else,” he stated.
“We have fantastic employees who are servants of our brand, and we will ensure people are treated as best as possible and with the utmost level of dignity.”
He said the group’s worldwide restructuring plans – which initially involved plans for some 2,000 job losses, mostly in Germany, had pre-dated the pandemic, while the UK operation had been subject to specific negative impacts due to Brexit.
“Ourselves and the industry have been under pressure for the last few years, brought on by Brexit, and the market is consolidating in the UK. Corona has not caused a new plan, it’s caused us to accelerate our plans and we believe we have it strategically right,” he explained.
“It’s very important to note that we have come up with a localised action plan that will not take away the USPs or value-add that we have in the market.”
Miles said there were no plans to close down the showroom at the firm’s Brentford HQ, and it would in all likelihood be an even more important asset in future because customers that would previously have visited its giant Wiesloch site may prefer not to travel.
“We absolutely plan to keep the showroom. Post-Corona with travel restrictions and quarantine, we believe we will have increased demand for the Brentford showroom,” he said.
In the letter, Heidelberg said it was also reviewing its areas of operation with a view to streamlining structures “to ensure the profitability of the business and to ensure its long-term future and viability”.
It has begun a 30-day collective consultation with union Unite, which has recognition at the business.
The manufacturer said it would look at options such as voluntary redundancy or early retirement, with enhanced terms available.
“We will consult with Unite with a view of reaching an agreement. We want to have genuine and good faith discussions with Unite about the issues under consultation, and we have an open mind to any feedback the workforce may have in response to our proposals.”
Heidelberg UK employs more than 200 staff, and 55% of the workforce had been furloughed until the end of last month under the government’s Job Retention Scheme.
“Everyone is off furlough as of this week due to entering into consultation. We can’t restructure and furlough at the same time,” Miles said.
Heidelberg has also been preparing the Brentford building for new Covid-secure working practices, including implementing restaurant-style changes to its canteen. "The plan is that by 15 June the building will be available if the government regulations allow our staff to return," he added.
In its most recent available results, for the year ending 31 March 2019, Heidelberg UK posted sales down 14.5% at just under £80m, and made an operating loss of nearly £2.5m. Three years ago sales at the business were more than £100m.
Regarding the worldwide restructuring, a spokesman at Heidelberg’s headquarters in Germany commented: “We reached fundamental agreement with the employee representatives that the program of measurements will lead to around 1,600 positions being cut back worldwide. Therefore about 250 positions have already started to be cut back outside Germany. But we don’t break it down by countries.”