Arbroath has been hit by a second jobs blow, with offshore engineering firm Axon making about 25 of its workforce redundant.
The news, affecting 35% of its payroll, comes in the same week as employees at oil giant Halliburton’s factory in the Angus town learned they could soon be out of work.
Local councillor David Fairweather said the development at Axon Well Intervention Products in the Kirkton industrial estate was “not good at all”.
He added: “My big worry is that there may be a snowball effect. Arbroath has a number of North Sea energy industry companies and there must be a concern that more will follow. Where will this all end?”
US energy giant Axon has a workforce of 70 and has been in Arbroath since 2011, when it took over Mechserv Ltd.
The deal involved the operation at Arbroath, where it has two units on the Kirkton estate, and the Mechserv branch in Dubai.
Axon makes pumping systems for the offshore oil industry which can be used for a wide range of fluids and nitrogen; along with equipment for cementing, coiled tubing, slurrification, hydraulics, and vacuum units.
At the time of the takeover Axon CEO Gary Stratulate said Mechserv’s high-quality operations would expand its service. It would support customers in Europe and the Middle East by providing the ability to manufacture, refurbish and service products in Scotland and the Middle East.
The oil price collapse has undermined the industry, off and onshore, and Axon in Arbroath is one of the latest casualties.
Earlier this month eight employees were made redundant, and there was hope that their departure would be the limit of the move to reduce the workforce to match the falling workload.
Letters have now gone out to up to 20 more personnel to say that they too were losing their jobs.
The company was asked yesterday to confirm that 25 to 30 jobs would be going, and plant human resources manager Nicola Peal replied: “I can confirm that we are in a consultation period for a potential redundancy situation. During this period we are working hard to minimise any potential job losses.”
She said it was inappropriate to make any further comment at this time.
Yesterday afternoon, however, a statement was issued by Jim Yeats, Axon’s managing director for Europe and Middle East. He said: “As a company specialising in the design and manufacturing of specialised oil and gas industry equipment Axon Well Intervention Products Ltd is faced with the direct negative impact of project cancellations and cuts in capital expenditure by the industry’s operating and service companies.
“Therefore we have to align our cost structure to match the market conditions. This includes rationalising our manufacturing operation within one facility in Arbroath, and a reduction of the workforce from 70 to approximately 45 personnel.
“This is a very difficult time for everyone, and we are dealing with this as sensitively as possible and in full consultation of the employees.
“Our future is in Arbroath and we will be focusing on improving our systems and processes during this downturn to benefit our employees, customers and suppliers.”
Halliburton is cutting its global workforce by more than 5,000 personnel, and said this week that the impact will be across all areas of operations.