Jingye to cut 400 jobs as part of British Steel takeover
Jingye will cut a tenth of British Steel’s workforce at its Scunthorpe plant as the Chinese firm gears up to take over the embattled manufacturer.
The company, which is in the process of finalising its £50m deal for the insolvent firm, is looking to implement a range of cost saving solutions.
The Daily Telegraph reported that Jingye had begun sending new contracts out to employees, but around 10 per cent of its 4,000-person workforce would not receive one.
Since it failed last May, British Steel has been run by the Official Receiver and is being propped up by taxpayers.
The new contracts will not cut pay, but will bring an end to job perks such as excessive holiday allowances, bringing in new elements like parental leave instead.
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In January it was reported that the Chinese conglomerate was mulling cuts of up to 500 jobs.
Jingye are looking to pump £1.2bn into the firm, and as part of this are reportedly considering reopening one of the plant’s blast furnaces.
Although the firm is hoping that the takeover will be complete by early March, it is still in negotiations with the French government, who are opposing the deal.
The French government has a say in the takeover decision because British Steel owns a plant in Hayange in northern France that supplies rail to French state railway company SNCF, and is designated a strategic national asset.
In December it was revealed that the Hayange plant, which is one of the most profitable parts of the business, had been put up for sale separately to the rest of British Steel’s assets, with the blessing of the French government.
A source close to Jingye told City A.M. that negotiations with the French government were proceeding as planned and that a decision would be made in February.