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Osborne鈥檚 chief executive has said not enough clients are preparing to help out main contractors and pick up the costs of the covid-19 pandemic as the firm began a jobs cutting programme yesterday which will see 75 staff axed.

The company, which was set up in 1966, formally started a consultation process to pare back its 1,200-strong workforce after income slumped 30% in April and May.

The company posted revenue of 拢392m in the year to March 2019 but Andy Steele said workloads at its building business, which is responsible for around 40% of turnover, had nosedived since the coronavirus crisis escalated, meaning overall income for this current financial year is expected to be off by 20% against its budget.

Steele said too many clients were querying main contractors鈥� claims for time and money in the wake of the delays caused by the pandemic. 鈥淸They] have to accept that some contract conditions allow for recovery of costs. That鈥檚 the bit that is key.鈥�

The firm has been forced to spend extra money on logistics work, such as reconfiguring sites to make them covid-secure, but Steele said a willingness from clients to stump up 鈥渋s currently not there鈥�.

He added that without certainty about future workloads, the firm, which has also been told some jobs it has won have been deferred, meant it had to cut back costs.

鈥淭he last thing I want to do is lay people off but we鈥檝e got to protect the whole,鈥� he said. 鈥淚t鈥檚 really tough letting people go but I can鈥檛 play a guessing game about certainty of work anymore.

鈥淎s an industry we don鈥檛 have the profitability and float to hang on to staff without that guarantee of pipeline. The costs we鈥檝e incurred soon become unacceptable.鈥�

Steele said the firm, which furloughed an initial 300 people which has since dropped to around 150, was seeing productivity levels at its sites running anywhere between 40% and 100%. 鈥淚t depends at what stage of the job you鈥檙e at.鈥�

He added it was having difficulty sourcing materials while some jobs had been held up by other matters out of its control 鈥� such as delays to critical pathway utility works which were only just starting to get going again.

Steele, who is deputy chairman of Build UK, said that in the wake of the crisis he was worried clients would expect firms to return to cut-throat bidding to try and win the reduced number of jobs coming up grabs. 鈥淎 race to the bottom is not good for the industry,鈥� he added.

Osborne鈥檚 building division is expected to be down to around 30% of group turnover this current financial year. But Steele said its infrastructure business, which concentrates on highways and rail work, had been performing well during the crisis. 鈥淚t has kept us going,鈥� Steele added.

Osborne is the latest name to join a growing list of firms that have begun laying off staff because of the pandemic. Wates, M&E contractor T Clarke and brickmakers Ibstock and Forterra have already said they are axing close to 1,000 jobs between them. Earlier this week, Atkins said it was laying off 280 people because of worries over the slowdown in airports work.