Unless you’ve been hiding under a rock for the past few days and weeks, you will be aware that construction giant, Carillion, has collapsed.
The company employed around 43,000 people worldwide, half of whom worked in the UK. And now, thousands of those jobs are at risk.
Who is (or was) Carillion?
Carillion was responsible for many high-profile construction projects across the UK, including:
- £1.4bn high-speed railway line for HS2
- Royal Opera House
- Library of Birmingham
- Tate Modern
- Battersea Power Station
The business also held around 450 Government contracts, including:
- Providing 11,500 in-patient hospital beds
- Providing 50,000 homes for military personnel
- Providing meal services to 218 schools
- Cleaning, landscaping and catering for 50 prisons
- Managing the Smart Motorways traffic control system
So what went wrong?
In 2016, Carillion had sales of £5.2bn. Until July 2017, their market value was almost £1bn.
But…
The company took on too many unprofitable contracts, three major projects over-ran, and key clients delayed payment.
As a result, Carillion issued three profit warnings in five months, and the share price plummeted by more than 70%.
The business was forced into liquidation in January 2018, with £28m in the bank, and debts quoted between £900m and £1.5bn, plus a £590m pension deficit.
What does this mean for you?
The Government has set up a task force to deal with the Carillion crisis and the ripple effect on small businesses and employees across the country.
They have said staff and contractors working on public sector contracts will continue to be paid via the official receiver – but 30,000 small businesses are thought to be owed money, construction on building sites has stalled, and other workers and sub-contractors have been laid off with immediate effect.
For example, according to Irish News, there could be 500 redundancies in Northern Ireland.
The situation is changing moment by moment.
Some companies, such as Nationwide, used to outsource cleaning and maintenance to Carillion. They have now arranged to employ those workers direct.
If you were employed by Carillion, or your own employer is facing financial difficulties, you may need our expert help to negotiate a redundancy package.
For more on this subject, please read our article When is redundancy unfair?
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