Dozens of jobs are set to be axed at a world-famous brand that has been at the heart of its community for more than two centuries.
Johnstons of Elgin has begun a process that will see “around 60 full-time equivalent” jobs made redundant in Moray.
Employees have been informed that around 8 per cent of the 750 members of staff at the Elgin-based textile business will be laid-off.
Unite the Union is involved and has said it will “fight tooth and nail to avoid compulsory redundancies”. Unite and Johnstons are meeting next week.
Redundancies come after an unexpected decline in sales, a spokesperson for Johnstons confirmed.
“In results to be filed later this month, Johnstons of Elgin will disclose sales for the year ending December 2023 of £100m, up 20 per cent on the prior year.
“We have seen strong growth in each of the last three years in line with the overall strength of the luxury market following the pandemic.
“However, in 2024 the market has slowed considerably, due to global economic uncertainty and changes in consumer behaviour.
“We now expect sales in 2024 to be lower than last year and have had also to revise downward our future projections for 2025.
“Unfortunately, this means that we will have to consult with our workforce in Elgin to restructure our team in line with current and expected future demand.
“We expect 60 full-time equivalent roles to be affected from a total workforce of around 750 at this location.
“There are no plans to reduce our workforce in our Hawick mill, where volumes have been less impacted.
“In the longer-term we expect the luxury market to recover to a more stable long-term growth trajectory, albeit at a slower rate than we have seen in the last decade.
“We continue to invest in equipment, training and development to be well placed to be able to support our customers and grow our own brand as the market improves.”
Marc Jackson, Unite industrial officer, said a formal meeting with Johnstons will take place, with Unite’s aim to avoid compulsory job losses.
He said: “Johnstons of Elgin has informed Unite of the potential for redundancies at the Elgin site.
“We are actively engaging with our members and in discussions with the company to minimise any impact.
“Unite has made it crystal clear to Johnstons of Elgin that we will fight tooth and nail to avoid any compulsory redundancies.
“We believe other options have to be on the table including voluntary redundancies.
“Unite will be formally meeting with Johnstons next week in order to advance these objectives in the interests of our membership.”
In a letter to staff seen by The Northern Scot, Chris Gaffney, Johnstons chief executive, wrote that there is “not enough work” to maintain current staffing levels.
He said: “Johnstons sales increased from £52 million at the low point in the pandemic in 2020 to a record high of £100 million in 2023.
“We are now seeing a significant slowdown in the market. We… expect to finish 2024 with lower sales than the prior year.
“Forecasts indicate that we will see a further reduction in sales in 2025.
“Having built our team based on a growing market, and with further sales declines projected, there is simply not enough work to keep the current level employment at our Elgin site.”
Mr Gaffney adds that he understand this will be an “unsettling” time and that the redundancy process will be completed “as quickly as possible”.
The aim is to inform all staff involved by the end of October, the letter says.
It adds: “This is not something we undertake lightly and we are very conscious of the impact this will have on families and the wider community.
“We will do all we can to support those that leave the company and will work with local service providers to identify alternative employment or training opportunities.”
Johnstons of Elgin was founded by Alexander Johnston in the town in 1797. Its other mill is based in Hawick in the Scottish borders.