Confectionery giant Nestle is planning to cut almost 600 jobs in the UK, close a factory and switch production of some products to Europe, the company announced.
The Swiss-owned firm is proposing the closure of its site in Fawdon, Newcastle upon Tyne, towards the end of 2023, with the loss of around 475 jobs, with a further 98 job cuts in York.
The company said it is proposing changes to adapt its confectionery manufacturing for the future, with a £29.4 million investment at its factories in York and Halifax.
The company said: “Nestle Confectionery has an ambitious business strategy in the UK and these proposals are intended to support our long-term success in an increasingly competitive category.
“The proposed changes would create a more efficient manufacturing footprint and, in turn, allow greater strategic investment in Nestle’s biggest confectionery brands.
“We have chosen to announce these proposals as early as possible to provide the maximum time for consultation with our colleagues and trade unions.”
The GMB union said it is “sickening” that lives are being “ruined in a ruthless pursuit of profits”.
The factory at Fawdon, which first opened in 1958, makes products including Fruit Pastilles, while the York site manufactures KitKats.
Nestle, which employs 8,000 workers in the UK, is proposing to move production of products from Fawdon to other factories in the UK and Europe.
The company said it will make sure those affected are “properly supported” throughout a consultation process.
The proposals include a £20.2 million investment at the York factory to modernise and increase production of KitKat, where the brand was first created in 1935, and a £9.2 million investment at Halifax to take on the largest portion of Fawdon’s production.
A statement said: “The decision to propose Fawdon’s closure follows significant investment and a sustained effort by the factory team to reduce that complexity and introduce new products in recent years.
“The skilled and dedicated team at Fawdon have worked tirelessly to deliver those changes and these proposals are absolutely no reflection on their efforts.
“If these proposals go ahead, we would expect, in future, to be manufacturing a higher volume of products overall while operating a smaller number of factories.
“We do not under-estimate the impact that the closure of the Fawdon factory would have on the local area and, as part of the consultation, we want to work with the local community to find ways that we can support the area and our employees if these proposals were to go ahead.
“We believe these proposals would strengthen the UK’s position as a critically important hub for Nestle confectionery and home to the expert manufacture of many of our most popular brands including KitKat, Aero and Quality Street.”
GMB national officer Ross Murdoch said: “To ruin hundreds of lives in a ruthless pursuit of profits, to the very workers who’ve kept the company going during a global pandemic, is sickening.
“Nestle is the largest food producer in the world, with astronomical profits. It can afford to treat workers right.
“Instead, they’ve allowed factories to deteriorate, outsourced production overseas and now slash almost 600 jobs.”
Joe Clarke, national officer of the Unite union, said: “The news about Nestle’s plans for its sites in Newcastle and York is a cruel body blow to the dedicated workforces, their families and, more widely, the regional economies.
“We will be asking for an urgent meeting with the management to ascertain the business rationale for these decisions from a multi-national company which is highly profitable.
“The fact these announcements have come during a global pandemic is particularly bitter and heartless.”