Collapse of construction giant sees over 2,000 jobs cut
Thousands of people are now without a job following the collapse of international construction giant ISG. Around 2,200 people have been made redundant with immediate effect as the company went into administration. 200 employees will stay on to assist the administration in winding down the business which holds over £1 billion worth of government contracts.
The business which is owned by American firm Cathexis, had struggled financially for some time. Attempts to secure a “rescue deal” had failed.
Apple, Barclays, and Google are among ISG’s private sector clients in the UK.
“Some of you may have seen reports in the media that ISG has filed for administration here in the UK,” an email sent by chief executive Zoe Price to all ISG staff. “With sadness, I can confirm that this is factually correct. This was not the way I wanted you to find out and the news should not have leaked in this way.”
Price said that staff would be paid as normal and that the collapse of the firm had been as a result of “legacy issues” that relate to “large loss-making contracts” which were secured between 2018 and 2020.
“Trading out these projects has had a significant effect on our liquidity. So even though we have been profitable this year, our legacy has led us to a point where we have been unable to continue trading,” she wrote.
“Significant efforts” she said, had been made to find a buyer for the business but these were unsuccessful. No potential buyers had come forward that were able to show that they could afford to finance the operations and keep the firm afloat in the future.
“We wish to be clear to employees, suppliers, and customers that it was not possible to conclude a sale as the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent,” joint administrators EY said.
The eight arms of ISG’s UK business, which also include its engineering and retail branches, have all been placed in administration.
