Sunderland MP Julie Elliott has slammed the Government as “solely responsible” for the loss of hundreds of jobs at Wearside housing provider Gentoo.
The company gathered staff together to break the news that 330 jobs are being axed as they are shedding 18% of the workforce.
Gentoo announced in August that cuts needed to be made and this morning confirmed that it will need to reduce its controllable costs by £18.25million and is forecasting to achieve this by March 2018.
To achieve these savings the group has proposed it will need to make the 330 redundancies.
Sunderland Central MP Julie Elliott said: “This is very sad news for Gentoo employees who have been the driving force behind the fantastic work Gentoo has done since becoming the main social landlord in Sunderland.
“The Tory Government are totally altering the way housing associations operate in a way that does nothing to address the worsening housing crisis. They are solely responsible for these job losses.”
All staff were briefed personally by Gentoo’s acting chief executive John Craggs yesterday. The group has explained that it will be looking for voluntary redundancies and staff seeking early retirement to come forward in the first instance.
They claim staff have been reassured that there will be no compulsory redundancies taking effect before April next year.
Gentoo says it will be offering a comprehensive suite of advice and support to help staff throughout this process.
Mr Craggs said: “It is never easy to make announcements like this, especially when you have such a passionate and dedicated workforce like we have here at Gentoo.
“The unfortunate reality is that our sector is facing a huge period of change and a range of financial pressures and we have to act now to ensure the group remains fit for the future. We pride ourselves on being a responsible business, and this starts with treating our people well and fairly. 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 and keep compulsory redundancies to a minimum.
“An overview and timeline was outlined to all staff and they will continue to be fully informed at every stage. We have also set up a dedicated internal team to support staff.
“Continuing to deliver a quality service for our customers remains our priority.”
Gary Hutchinson, chairman of the North East Chamber of Commerce and Sunderland Business Group, said: “This is very sad, but expected news following the initial announcement recently.
“Government are responsible for the cuts which are driving this position. Our thoughts are with those affected at this uncertain time. The NECC and Sunderland business group will fully support gentoo as required through the difficult time ahead.”
Tom Allison, a GMB spokesman for the city said it was obviously very bad news.
He said: “It is devastating to the workers, to the city and to the local economy.”
The union leader said this crisis management has been forced upon Gentoo by government policies. He said: “It has been devastating news recently for the region, such as the SSI steel plant closure, I think George Osborne is trying to create a Northern Poorhouse, not a Northern Powerhouse.”
A member of staff at Gentoo who contacted the Echo, said they were shocked, but not surprised by the announcement.
He said: “It is dreadful news. People have families to support.”
Firm must save £70million
In August Gentoo staff were hit with the news the company was looking to save £70million from its budget over the next four years.
The Doxford International-based company said it needed to save £18million a year between now and 2020, making job losses inevitable. The then chief executive Peter Walls blamed Government funding cuts for the need to reduce spending.
He said: “The Government’s recent summer Budget announced reductions in social housing rents and other welfare reforms.”
These have had significant implications on Gentoo.
Mr Walls said in August: “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.”