Amazon UK warehouse shake-up places 1,200 jobs at risk
Amazon has revealed plans to shut three UK warehouses, a decision that will affect 1,200 jobs, but open two new major fulfilment centres.
Sites in Hemel Hempstead, Doncaster and Gourock, in the west of Scotland, have been proposed for closure.
A spokesman said all the workers would be offered roles at other existing Amazon locations.
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A union representing some of the workers at the Hemel Hempstead site expressed disappointment over the decision and was sceptical about the prospect of acceptable, alternative work being found for each person affected.
Amazon said its planned new sites – at Peddimore in the West Midlands and Stockton-on-Tees in the North East – would result in the creation of 2,500 jobs over the next three years.
The company said: “We’re always evaluating our network to make sure it fits our business needs and to improve the experience for our employees and customers.
“As part of that effort, we may close older sites, enhance existing facilities or open new sites, and we’ve launched a consultation on the proposed closure of three fulfilment centres in 2023.
“We also plan to open two new fulfilment centres creating 2,500 new jobs over the next three years.
“All employees affected by site closure consultations will be offered the opportunity to transfer to other facilities and we remain committed to our customers, employees and communities across the UK.”
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The Amazon distribution warehouse in Hemel Hempstead is among the sites facing closure
The Hemel Hempstead site employs 500 staff while there are 400 in Doncaster.
Gourock is home to the fewest number of employees, at 300, but it has less scope for alternative work in the surrounding area within Amazon.
The company acknowledged this and said they were to be offered retraining and reskilling opportunities as part of efforts to secure new work.
Steve Garelick, GMB union officer for Hemel Hempstead, said: “Disappointed for the workers and disappointed for the town and a deep concern this is the thin end of the wedge for the local area.
“Some workers may be offered alternative roles but decamping to Luton, Dunstable or Milton Keynes isn’t as practical as you might think.”
The announcement followed a group decision last week to axe 18,000 jobs globally, making Amazon the latest US tech firm to slash its workforce in the tougher economy.
Amazon has more than 1.5 million employees around the world – with 300,000 in corporate roles which were most likely to be affected by the worldwide cuts.
One of the world’s largest investment firms has waded into the fight over the future of Thames Water, the water utility which is racing to stay afloat.
Sky News has learnt that KKR is in talks with Thames Water and its advisers about participating in a £3bn share sale which forms part of a wider recapitalisation plan.
City sources said this weekend that KKR, which has more than $550bn of assets under management, was among a handful of parties which had accessed a data room for potential investors.
Rothschild, the investment bank, is running a process to raise around £3bn from the sale of an equity stake in Thames Water, which is grappling with a debt mountain of as much as £19bn.
Other investors which have expressed interest in acquiring newly issued shares in the water company include Carlyle and Castle Water, the latter of which is controlled by Graham Edwards, the Conservative Party treasurer.
Global Infrastructure Partners, which is owned by BlackRock, Brookfield and Isquared are also reported to have lodged an interest, although sources said that the latter two were unlikely to play any further role in the process.
The crisis at Thames Water is presenting Sir Keir Starmer’s administration with a challenge as the debt-laden company attempts to avert temporary nationalisation.
Insiders said that KKR was “a serious player” in the equity process being run by Thames Water, although its outcome hinges on a final determination by Ofwat, the industry regulator, which is due by January at the latest.
Thames Water – and other suppliers across Britain – wants to hike bills and is demanding leniency from Ofwat on fines for past transgressions.
One obstacle to KKR buying a big stake in Thames Water, which has more than 15m customers, may be its 25% holding in Northumbrian Water.
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Under Ofwat’s mergers regime, the Competition and Markets Authority would need to review the deal, although there would not be an automatic prohibition.
The share sale process is being run in parallel to an attempt to raise up to £3bn in debt financing from hedge funds and other investors.
A battle has broken out between the holders of Thames Water’s class A bonds, which account for the bulk of its borrowings, and its riskier class B debt.
Both sets of bondholders have submitted proposals to the company, with the class A’s arguing that theirs is more certain and the class B’s arguing that theirs will save the company £380m or more in fees and interest over a 12-month period.
Thames Water has already endorsed the class A group’s offer, with an initial £1.5bn of funding to be delivered immediately.
The class A bondholders are now trying to secure backing for their proposal within the next fortnight.
Their group, which includes the American hedge funds Elliott Advisers and Silverpoint, would earn in the region of £650m during the first year of the financing.
One area of controversy is likely to be any incentive plan for Thames Water bosses, led by chief executive Chris Weston, as part of a deal to give the company a stay of execution.
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Last month, the environment secretary, Steve Reed, established an independent review of the industry that will look at far-reaching reforms.
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It was unclear this weekend which of KKR’s funds was participating in the Thames Water equity-raise.
The firm owns John Laing, an infrastructure investor, which it took private in 2021.
It has also owned South Staffordshire, another water company, selling its 75% interest in 2018.
KKR declined to comment.
The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.
Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.
Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.
An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.
Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.
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On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.
“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.
His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.
Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.
A spokesman for the Department for Business and Trade declined to comment ahead of Monday’s call.
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