Job losses and cost cuts as cosmetics manufacturer struggles against recession

07-Mar-2013 - Last updated on 15-Mar-2017 at 16:04 GMT

The recession appears to have claimed another victim in-part in the UK, as cosmetics manufacturer Swallowfield has been forced to cut jobs as it looks to reduce costs following a turbulent twelve month period.

The firm is one of Wellington, England's biggest employers; however it has revealed that it has taken various cost-cutting measures over the last nine months, including making an undisclosed number of posts redundant.

“In light of the current financial climate and in order to secure the economic sustainability of Swallowfield, we have taken a number of steps in the past few months to reduce costs,” says a company statement.

“This included a thorough review of all our suppliers and purchasing prices. We are pleased to report that this process has had a positive impact on our external expenditure.”

In its latest interim report, Swallowfield announced that revenue decreased by 19 per cent to £25.5m (29.4m euros) reflecting the higher level of changes in the customer and product mix than is normal and which was not fully compensated for by new launches.

Economic uncertainty

Over the last six months, the economic situation in the UK and Europe has once again deteriorated and appears to have affected consumer and customer confidence across most major markets, which has hit Swallowfied hard.

This impact on the toiletries and cosmetics sector resulted in lower levels of underlying demand and greater caution in the timing and incidence of new product launches.

“The bigger short-term impact from this fragile economic background is that customers continue to consolidate, rationalise and review their supply chains for efficiencies and cost savings,” adds the UK firm.

“This situation has continued and has resulted in greater movement in the underlying shape of our customer and product portfolio than is normal.”

CEO steps down

The manufacturer has also announced that chief executive Ian Mackinnon will step down after 13 years at the helm.

The statement continued: “We have also focused on ways to improve efficiencies during production which involved reassigning staff to other roles.”

“Unfortunately, as part of our improved efficiency initiatives, there have been few instances of redundancies, however, we have managed to keep this to an extremely low number over the past nine months.

“As part of the reorganisation we have managed to minimise job losses and are now in a position to move forward as a business.”