Laing O’Rourke to axe 60 jobs at offsite factory

Laing O’Rourke is looking to cut 60 jobs at its offsite factory in a bid to reduce operating costs.

The contractor, whose latest financial results saw it plunge to a £288.1m loss on £3.3bn of turnover, blamed delays to projects for the latest round of redundancies.

A spokesperson for its Explore Manufacturing subsidiary said: “Due to challenging market conditions, we have seen delays to some of the projects [the Centre of Excellence for Modern Construction] was set to service. Therefore, we need to reduce our operating costs, while continuing to deliver projects and protect our ability to invest in the technology and innovations that will transform construction.

“We know that any proposal to reduce roles creates a difficult time – we will work with our people and continue to support them through this process.”

The latest redundancy round follows a cut of 200 jobs from across the contractor last summer, a move that was also blamed on project delays.

Laing O’Rourke has invested millions in its Centre of Excellence for Modern Construction offsite manufacturing hub, based in Steetley, Nottinghamshire, since it opened in 2010 as part of chief executive Ray O’Rourke’s vision to transform the business “from trades to technicians”.

In 2017, he told Construction News that making manufacturing “attractive in the marketplace” was key to potential plans to float the company on the stock exchange.

The firm later took out full-page adverts in The Sunday Times promoting its design for manufacturing and assembly (DfMA) approach.

In December 2020, chief financial officer Rowan Baker told CN that the firm’s DfMA nouse gave it an edge with the government and that O’Rourke was supplying other tier one contractors from its offsite facility in Steetley.

However, in November 2023 group technical director Andrew Wolstenholme told the House of Lords Built Environment Committee that the “low-cost, competitive-tender system” currently used by the public sector was not fit for promoting modern methods of construction (MMC).

He said: “I do think that government departments have to understand that if you want to procure for value… you can’t continue to put risk burdens onto the supply chain, such that the innovations are not going to create the opportunity.”

Accounts for Explore Manufacturing show it turned over £65.7m in the year to 31 March 2022, and made a £831,000 pre-tax profit.

It was subsequently combined with Laing’s MEP manufacturing arm Crown House Technologies, and the enlarged business posted revenue of £97m and a £2.6m pre-tax profit in the 12 months ending 31 March 2023.

Several offsite specialists have collapsed in recent years including Ilke Homes, House by Urban Splash, Mid Group, Eco Modular Buildings and Caledonian Modular. L&G also wound down its offsite business after years of heavy losses.

The Lords’ Built Environment Committee inquiry into MMC recently concluded the government lacked a clear strategy for investing in such companies and projects.

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