More than 150 Dundee jobs are under threat after support services firm May Gurney said it was slashing its Scottish workforce following the scaling back of a major gas pipeline contract.
The Norwich-based company confirmed 250 workers from its 600-strong workforce north of the border face the axe after client Scotia Gas Networks indicated it is to draw back on the work it outsources to third-party contractors.
The five-year working agreement between the two companies ends in March, the same time energy industry watchdog Ofgem is due to introduce new pricing controls for the UK gas industry which will be in place until 2021.
May Gurney said the anticipated job cuts would be made at its bases at Perrie Street in Dundee, Aberdeen and Falkirk.
Employees at the three offices were told on Wednesday that they are at risk of redundancy, and a formal 90-day consultation is now under way to identify the job roles which will be lost.
The Courier understands around 70 jobs will be lost at Dundee, with Aberdeen to lose around 50 and Falkirk to take the largest hit of around 130 axed posts, although those figures have not been confirmed by the company.
May Gurney has had a presence in Dundee since early last year, after it bought over Turriff Group in a deal worth up to £23 million.
The Dundee operation employs 155 workers while a further 115 are based in Aberdeen, where Turriff Group formerly had its headquarters.
May Gurney confirmed that up to 250 jobs would go but said it was looking for possible redeployment opportunities for affected staff.
”May Gurney and SGN are working together to keep the impact of this reduction to a minimum,” the firm said. ”To this end, we have been successful in agreeing with SGN the retention of some mains replacement and all new connections work in the north east of Scotland until 2014.
”While May Gurney will continue to work with SGN in a strategic partnership, this decision will result in a significant reduction in the work we undertake for the group in Scotland and, also, our staffing requirements going forward,” it said.
”In addition to continuing our discussions with SGN, we have also been working with one of our other long-term clients, Scottish Water, with a view to using transferable skills and retraining to create new jobs on the contract we deliver for them.”
May Gurney has eight operating divisions and employs around 6,000 staff nationwide. Turnover in the last financial year was up 22% on 2011 at £695.3m.
SNP MP Stewart Hosie has asked for the Government-backed Partnership Action for Continuing Employment team to be deployed to help affected workers, and said he believes the job losses will happen over a period of months through to 2013.
He said the firm told him they remain committed to working in Scotland, and added that they will ”clearly retain a significant workforce in Scotland event after these redundancies.”
Labour’s North-East Scotland MSP Jenny Marra said: ”The Scottish Government needs to say immediately what they are going to do about this jobs crisis in Dundee.”
Dundee and Angus Chamber of Commerce chief executive Alan Mitchell added: ”Obviously it is disappointing news that so many local jobs are at threat but hopefully, even at this late stage, something can be done.”
A spokesman for Scotland Gas Networks which is part-owned by Perth-based utility company SSE said the company is negotiating with May Gurney over possible future collaboration.
He said: ”We have a five-year contract with May Gurney which ends in March 2013.”