Sunderland housing group Gentoo today announced it will be seeking major redundancies as it looks to make up an £72million funding shortfall.
The company, which manages more than 30,000 homes and has 70,000 customers, needs to save £18million a year for the next four years.
Gentoo Sunderland, which has 1,915 employees, is one of the city’s biggest employers.
The social housing provider says it will consult unions over the plans to slash its workforce, who were given the bombshell news this morning.
More than 1,200 staff were taken to Rainton Meadows Arena at Houghton-le-Spring in a fleet of coaches, where Gentoo Group chief executive Peter Walls delivered the news.
Mr Walls said: “The Government’s recent summer Budget announced reductions in social housing rents and other welfare reforms.
A significant proportion of these savings will need to come from our employee costs, and this will inevitably result in staff redundancies.Peter Walls, Gentoo Group
“We are currently analysing the implications of this on our business.
“Unfortunately, current estimates are showing that we will need to make savings in the region of £18million per year, over four years.
“It is with great regret that a significant proportion of these savings will need to come from our employee costs, and this will inevitably result in staff redundancies.
“Being a responsible business is important to us and our staff are the heart of the group.
“We really value our workforce and their input and as such want to inform and involve them in this process as early as possible.
“We are currently working through what the extent of this looks like and over what timeframe.
“Our final plan needs to be agreed by our Board during October, as we are required by our regulator to submit a revised group business plan to the Homes and Communities Agency (HCA) by 30 October.
“This is a very difficult time, however we will work with staff and our union colleagues to mitigate the impact of this as much as possible.
“Delivering a quality service to our customers remains our priority and we will ensure Gentoo remains fit for the future and that our service continues to be centred on our customers and their needs.”
It is not yet known how many redundancies Gentoo will be seeking.