Banknote and passport makers De La Rue have confirmed plans to make around 60 redundancies at their Gateshead printing operation.
The currency specialists say they have assessed manufacturing operations and have proposed redundancies from its workforce of 600 in the North East, but did not give a reason.
Earlier this year De La Rue issued a profit warning which anticipated a £20m fall in operating profit for the 2014/15 year.
The warning came despite news the firm had been selected as preferred bidder for a ten-year printing contract with the Bank of England.
A statement from a De La Rue said: “We have looked carefully at our manufacturing capacity requirements across the Supply Chain. As a result, we are proposing to reduce print capability at our Gateshead operation.
“Regrettably, if this proposal goes ahead, this will lead to some job losses at the site. We are in consultation with employees and working with the union and employee council to mitigate the need for compulsory redundancies and are anticipating circa 60 redundancies.”
Just this week De La Rue said it will take a £13.5m charge in its annual accounts next month after a major customer invoked a performance bond.
It relates to unresolved issues with a “major customer” regarding banknote paper production, which had been rumbling on since 2010. The customer has now invoked performance bonds that were in place since the contract was agreed and De La Rue said it hoped the move would draw the dispute to an end.
The firm’s 2014 accounts pointed to an investigation by external lawyers, commissioned by the board, which looked into “issues” which had been brought to its attention.
The investigation was said to have found “nothing of substance”, although it was established that certain paper specification test certificates had been deliberately falsified.
In April around 40 De La Rue staff at the firm’s Overton plant in Hampshire were offered voluntary redundancy.