SMD Jobs Hit By Sanctions Against Russia

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Wallsend-based manufacturer of subsea vehicle systems, Soil Machine Dynamics (SMD), will cut 70 to 80 jobs across its business, the company said Wednesday.

The thirty-day consultation period and necessary paperwork will be submitted to the Department of Business and Skills once the Consultation Committee Group has been established.

The news comes as SMD’s largest order in history for two suites of cable laying and burial equipment, has been suspended due to the rejection of an export license as a result of current sanctions in place for Russia.

This is a decision SMD said it will appeal, and the outcome will have a significant impact on the final redundancy numbers. SMD has continued to retain capacity in anticipation of this order but will be unable to continue to do this should the appeal fail.

Despite successfully diversifying the business SMD is suffering extremely challenging market conditions in areas in which the company is operating. The decline in demand from the oil and gas market, driven by the prolonged reduction in the oil price, has caused many projects to be shelved until at least late 2016. There has also been a significant reduction in UK based contractors within the offshore renewable market with subsequent implications for the UK supply chain.

Andrew Hodgson, CEO of SMD, said: “We are very disappointed to be in this situation given the inevitable impact on our colleagues and partners in our supply chain. A number of our key markets are subject to challenges for a variety of largely unrelated issues and we need to react to these challenges in order to sustain the business for the future. Our new owner, CRRC, have been incredibly supportive in both retaining capability this year and sanctioning further investments into next year. We hope to demonstrate that the UK continues to be the centre of our operations into the future”.

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