Princess Yachts restructuring to cost up to 350 jobs

Up to 350 employees will lose their jobs at Princess Yachts as part of a wide-scale restructuring of the Plymouth-based yard

Princess Yachts has announced that up to 350 jobs will be lost as part of a major restructuring at the Plymouth yard.

The cuts to the 2,000-strong workforce will be spread across back office, development and production divisions, the company added.

However, there will be no drop in production capacity, Princess claimed, due to the streamlined processes introduced with the launch of its latest models.

Chris Gates, managing director of Princess Yachts, said: “Today’s announcement of job losses, although not undertaken lightly, is designed to maintain the business in the best possible shape for the next phase in its evolution.

“Like all successful companies, we need to be able to adapt and adjust the constitution of our workforce periodically.”

Princess is one of the largest employers in the South West with five sites in Plymouth, and these job losses are expected to have a significant impact on the wider community.

The news comes just two days before Princess is due to unveil its new 75 Yacht (pictured above) at the London Boat Show.

Difficult trading conditions have weighed on Princess’s finances, with the company posting a £11.3m loss for the 2014 financial year.

However, the firm claims to have a strong order book, following positive appearances at the recent Southampton, Cannes and Fort Lauderdale Boat Shows.

UPDATE: In response to the news, Sunseeker has increased its recruiment drive from 100 to 225 new staff.

The full statement on the Princess Yachts restructuring is as follows:

Princess Yachts is to undertake large-scale restructuring of manufacturing at its Plymouth headquarters, with the loss of up to 350 employees, the company announced today.

Having successfully weathered what proved to be a gruelling year for Britain’s yacht-building industry in 2014/15 – with factory closures, redundancies and insolvency among its competitors – Princess is looking to the new year with confidence and is implementing a range of long-term strategic measures designed to steer the business and its 2,000-strong workforce securely into the future.

With six new models across the M Class, S Class, V Class and Flybridge yacht ranges taking the company into new markets and sectors, and strong order books following good performances at the Cannes, Southampton and Ft. Lauderdale boat shows, Princess is entering 2016 with assurance and optimism.

Today’s announcement of job losses affecting back office, development and production divisions, while regrettable, forms part of a strategic plan to improve productivity across the company’s Plymouth facilities. Despite the tough trading climate from 2008 onwards, high staff levels had been maintained as the company evolved its infrastructure across key sites and invested in the development of new models. With the launch of the enhanced range this year, the workforce can now be scaled back without loss of capacity.

Princess’ ongoing investment programme will see its world-class range develop even further – and a number of new initiatives are under way to secure greater market share and brand recognition.

Princess continues to outperform the yacht industry in the face of unprecedented challenges. Persistent unfavourable euro/sterling exchange rates, recessionary pressures in target markets, and hurricane-force storms in 2014 that caused hundreds of millions of pounds worth of damage across the South West, meant that the company reported a modest loss – £11.3m on turnover of £239.5m – in 2014. (For context, Princess posted a profit of £4.8m in 2013.)

Chris Gates, Managing Director of Princess Yachts, said: “The strategic review of our business and the steps we are taking to improve production at our Plymouth headquarters have laid the foundations for an ambitious year. Our expanded range – with six new models launched in just six months – is the envy of the industry, and our continued commitment to the finest British materials and peerless craftsmanship will always set Princess apart.

“We have invested heavily in state-of-the-art facilities and product development while our competitors’ businesses have been contracting, and we are proud of our commitment to Plymouth, having maintained a consistently high level of employment throughout the recessionary period. Princess’ 50th anniversary finds the company starting the year at both the London and Düsseldorf boat shows with new model launches and strong plans for the future.”