Up to 430 people are set to lose their jobs as a Gateshead factory that supplies food to the likes of Marks & Spencer is going to shut.
Orchard House Foods plans to relocate production from its factory in Team Valley to its base in Corby, Northamptonshire. It is now consulting with staff, 430 of whom are at risk of redundancy, despite a banner attached to the Team Valley site which states "we are recruiting" that was still visible on Thursday morning.
Orchard House, which supplies the likes of Marks & Spencer, Morrisons and Pret A Manger, said it is offering support for any staff willing to relocate from Gateshead to the south midlands. Help will also be offered to staff looking to find employment elsewhere in the North East.
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Orchard House, which makes prepared and packaged fruit, fruit drinks, fruit jellies, fresh fruit yogurts, compotes and granolas, said the move is part of plans to consolidate production at Corby by the end of November this year. The Gateshead site is “continuing to make losses that make it commercially unviable” despite investment, the company claims.
Chief executive Steve Corby said: “We understand that this is an incredibly difficult situation for our employees, and our priority now is to ensure that we do everything we can to support them.
“Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long term.
“This is not a decision we have taken lightly and comes off the back of an incredibly challenging period for the sector.
“Like many other businesses across the UK, we have been suffering from a series of economic and business challenges. They include rising energy, raw material, transport and labour costs. There has also been a shortage of available staff to work at our Gateshead site.”
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