The Newcastle office of a North East-founded engineering group has closed and 26 jobs have been axed following a major restructuring.
Administrators were called into Patrick Parsons Ltd after it experienced difficult trading conditions and lost a number of live projects.
The firm was originally launched in Newcastle in the 1950s and had grown rapidly from a small operation of eight staff turning over around £1m, to an £18m turnover business with 250 staff in a number of offices by 2017, on the back of high profile work including projects at Durham Cathedral and the creation of the world’s first packaged white water course in Glasgow.
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Three years ago Patrick Parsons was gearing up for expansion after a multimillion-pound investment was made by LDC into the expanded firm, which had grown as a result of a successful ‘buy-and-build’ acquisition strategy.
However, Patrick Parsons Ltd recently called in joint administrators Lyn Vardy and Jonny Marston of Alvarez and Marsal to its Newcastle and Huddersfield offices, when the firm lost some live projects and project bids, and its pipeline of work continued to slow as a result of an increasingly competitive market.
As a result, 56 people have been affected and 26 technical staff have been made redundant. The Newcastle office of Patrick Parsons at Central Square has now closed.
The other 30 technical staff members have been transferred to other firms in the wider group, which now has bases in London, Birmingham, Huddersfield, Guildford and Dubai.
A total of 17 support staff, within the former Newcastle office’s marketing, finance and IT departments, have been transferred to the holding group and will soon move to a new office in Gateshead.
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As part of the restructuring, the holding company name for the group has changed to PPCE Group Limited.
A spokesman for PPCE Group said: “We have taken some difficult steps to restructure our business.
“Following a sustained period of challenging trading conditions, administrators from Alvarez and Marsal have been appointed to one of our operating companies, Patrick Parsons Limited, which runs out of our Newcastle and Huddersfield offices.
“While 30 staff will transfer to other companies within the Group, it is with regret that 26 redundancies will be made to roles in the Newcastle office which will close. The Huddersfield business and its staff have been acquired out of administration and will operate as part of the group under a new company, JSA (Huddersfield) Limited.
“The rest of the group, which now comprises of JSA Consulting Engineers Limited, Stewart & Harris Limited, PP Consulting Engineers Limited, Stilwell Limited and JSA (Huddersfield) Limited, and provides specialist engineering and design services across residential, commercial and infrastructure, remains strong, with a workforce of over 140 people and enjoys a robust order book and growth prospects.
“We are focused on moving the group forward in its new form.”