TROUBLED North East care business Southern Cross has revealed plans to axe 3,000 jobs as it battles to stave off financial ruin.
The company, which is responsible for looking after 31,000 residents across the UK, has 52 of its care homes in the region.
It recently warned that it was in a “critical financial condition” when it revealed a £311m loss in the six months to the end of March and yesterday said it plans to cut the workforce by 7% from 44,000 to 41,000 by October.
Southern Cross said it was committed to work with the GMB union to minimise the redundancies and added that home managers, deputies, activity co-ordinators and administrators will not be “directly” affected by the cuts.
Chris Jukes, GMB regional political officer, said: “It is a scandalous decision. We called for the Government this week to step in, and that is what we want now.
“Residents’ families and workers are looking on anxiously. The regulator, the Care Quality Commission, must ensure care standards are maintained.
“If it can’t do the job, then it should get out of the way and let someone else do it”.
Staff approached by The Journal at a Southern Cross Care Home in Newcastle had been told by senior managers not to publicly comment on the job losses, as speculation continues that some homes could close across the UK or be off loaded to other operators.
The full extend of the company’s troubles were revealed last week when it slashed the amount of rent it pays landlords by 30%. Earlier the Darlington based business saw revenue drop 3% as overall occupancy also declined. Without drastic action many city analysts believe the business could have ceased trading.
Councils in the North East that have contracts with Southern Cross are monitoring the situation closely. North Tyneside Council has more than 450 people living in 11 Southern Cross homes in the borough.
A spokesman said: “Our priority remains top quality care. We have a good relationship with Southern Cross and we are keeping a close eye of developments. We have not yet had any sign of homes on North Tyneside closing.”
The company is also one of the biggest providers of care home places in Newcastle.
Its executive director of Adult and Cultural Services Ewen Weir said: “Along with our regional partners we are talking to Southern Cross representatives who assure us the business is currently running as normal, and it can continue to meet the needs of older people whilst the financial restructuring takes place.”
He added: “In the unlikely event of future home closure, the Directorate has a robust contingency plan in place to manage this.” Jamie Buchan, Southern Cross chief executive, said: “We are engaging with colleagues to put in place the best possible staffing model for our future needs, and one which fully embraces the best practice available to us.”
It is believed that over 300 nurses and 1,275 care staff are among those set to lose their jobs. Almost 700 catering posts will also be axed, as well as 440 domestic jobs and 238 maintenance posts.
A Department of Health spokesman said: “It is for Southern Cross, its landlords and those with an interest in the business to put in place a plan that stabilises the ownership and operation of the care homes.”