Legal & General (L&G) is to cease new production at its loss-making modular housing factory, the company has confirmed.
L&G says it has made the decision in order to assess the future of the business, putting 450 jobs at risk at the Leeds factory, which is one of the largest of its kind in the UK.
The insurance and pensions group said it was forced to cease production following long planning delays and weak demand.
The business had made slower progress than expected, racking up cumulative losses of £176m since 2016.
L&G had injected £182m into the modular business over that period.
The company says it will begin a consultation with employees about redundancies, retaining a number of them in order to build modular homes for existing projects in Bristol, Selby in North Yorkshire, and Broadstairs in Kent.
Strategic options for the factory include a sale, merger, fundraising from third parties, and eventual closure.
Bill Hughes, chair of the Legal and General modular homes board, said: “We are reluctantly proposing to reduce business activity and cease production of new modules at the factory.
“We recognise this will be a challenging and uncertain period for our staff and we will be actively exploring redeployment opportunities and supporting them during this difficult time.”
Hughes added: “We are continuing to actively explore all options available to us and will retain a select workforce to ensure high-quality delivery and aftercare services for our existing customers, whilst engaging with each of our partners regarding ongoing modular projects.”
Inside L&G’s Leeds factory. Credit: L&G
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