Last Friday, almost 400 workers were told the devastating news they were out of a job – victims of two companies which had found themselves sinking in a financial quagmire.
For the staff at the Whitstable office of one of the nation’s biggest construction companies, ISG, and tools and hardware firm Folkestone Fixings (FFX), they find themselves at the epicentre of the impact.
But the ripple-effect of such collapses can be felt far and wide.
Those companies which provided goods and services to both – the supply chains – will be left counting the potentially high cost of losing a large customer and the very real prospect of getting little, if anything, of the monies they owed as they both flounder in adminstration.
Yet, while significant, there is optimism both towns will rebound from the painful blow they have just experienced.
“You’re not going to have a seismic economic impact because of this,” explains Tudor Price, chief executive of the Kent Chamber of Commerce.
“It’s not like when, say, Chatham dockyard closed or, to some extent, when Sheerness Steel went down – another large employer.
“We are blessed and cursed in equal measure here in the county in that we have a very diverse sector of industry and consequently we don’t have any one major employer outside the NHS and the public sector.
“So when things do go wrong, it’s not as impactful as it might be in some of the sort of more traditional heartlands of industry.
“We are, to some degree, protected. Where we do struggle is, because we do have that diversity, when you have a firm like Pfizer moving out it’s really hard to then move that talent to somewhere else within the county.
“They normally need to move outside Kent where there’s the variety or there’s the number of jobs available to them.”
When US phamaceutical giant Pfizer dramatically down-scaled its sprawling UK site in Sandwich in 2011 – with the loss of around 2,000 jobs – it created something of a domino effect.
A vast number of highly-skilled, specialist, often highly-paid, workers out of work saw many seek employment elsewhere – which in turn saw a short-term impact on the local east Kent housing market as they sold up to follow their new careers. Not to mention a talent drain for the county.
While turning back the clock to 1984 saw the withdrawal of the Royal Navy from the dockyard at Chatham. Some 6,500 staff were employed at the time and it had a devastating impact on an industry which had been Medway’s industrial backbone.
Spending in those communities would have dipped as a consequence of budgets being tightened and people moving away.
But it also stung the supply chain and derailed many unwitting victims of the decisions of other organisations.
The closure of the dockyard was perhaps the single most seismic employment shock to hit the county in the last 40 years. Few would argue it took decades for the local economy to recover.
“Studies on the regional employment effects of mass lay-offs aim to understand whether a local labour market is able to absorb a large employment shock through the renewed employment of affected workers,” explains a report by the inter-governmental Organisation for Economic Co-operation and Development.
“At the same time, a mass lay-off may also have negative consequences for other firms in the same region, for instance if firms have direct business links with the affected firm or the employment shock leads to a reduction in consumption demand.
“On top of the effects on local economies, mass lay-offs can have detrimental social effects on local communities and households of dismissed workers.”
Kent’s diversity of roles – and the current high number of vacancies – may soften the blow for many.
Adds Tudor Price: “Folkestone Fixings leans towards manufacturing, therefore you tend to have people who are medium and low skilled workers. But obviously there’s a lot of transferable skills.
“So that may have more of an impact on the the local economy, specifically Folkestone, in the short term.
“But of course, in the current climate there is reasonably low unemployment. There are still one or two challenges around recruitment, so it should be absorbed fairly easily.
“It’s when you’ve got the likes of Pfizer, where you’ve got scientists and lab workers, they’re not going to find any work locally and you lose them out of the county.
“So to some extent, FFX isn’t such a big hit and and that would be absorbed and redistributed across the economy.
“ISG on the other hand, is slightly more problematic because that’s exactly the opposite in that we have lot of highly-skilled individuals who have been engaged by ISG on various contracts. You then have subcontractors obviously working for them, also again relatively highly-skilled, and of course, they did a lot in terms of apprenticeships and internships and stuff like that.
“That has a wider knock-on effect and we’re responding to it here in Kent by engaging. We have our Kent Construction Expo coming up next week and so what we’ll be doing is engaging with those businesses and individuals who’ve now found themselves on the job market and doing a bit of matchmaking.
“We want to keep that talent base here in in Kent.”
For those at ISG, prospects may be relatively bright. While the construction firm was primarily focused on the £1bn worth of government contracts it held, the skills of those it employed are likely to be in-demand for a sector which has seen a skills-shortage in recent years.
With the Labour government keen to ensure housebuilding picks up the pace to tackle the housing shortage, it may prove fertile ground for those seeking new positions – as well as the prospect of upcoming infrastructure projects such as the Lower Thames Crossing.
ISG, owned by US firm Cathexis, is the sixth largest construction company in the UK.
Concludes Tudor Price at the Kent Invicta Chamber: “It’s hard not to get into cliches of green shoots of recovery, but talking to businesses, there is a sense that actually there are some positive opportunities on the horizon.
“We are waiting on the decision on the Lower Thames Crossing and there’s every reason to suggest that is going to happen.
“When you look at that outlook from the business community, particularly construction, I think there will be a lot of people who will be pretty keen to talk to ISG employees with a view to getting on board in the optimistic prospect of there being more work to come and therefore get the talent while it’s available.”