A RESTRUCTURE within one of York's largest employers Shepherd Group has resulted in the threat of jobs losses for its construction arm as bosses look to downsize the business.

Shepherd Group has confirmed it has entered into consultations with staff within the Shepherd Construction business.

The move follows losses of £8.2 million last year off the back of dwindling turnover, down a third to £240 million, reported by Shepherd Construction, which is the group's national contracting arm, based in Fulford Road.

Reporting its financial results in December last year, Shepherd Group bosses said they were disappointed by the performance of Shepherd Construction, stating "decisive mitigating action has been taken".

Around 180 jobs are reported to be at risk as a result of the restructure, with the majority rumoured to be back office staff, though Shepherd would not confirm numbers. It said the business entered into a formal 45 day collective consultation process with employees within Shepherd Construction and the divisional support teams on April 1, "to assess current resources".

Mark Perkins, Shepherd's chief executive said: "The executive board is currently reviewing the Shepherd Construction business, along with its support service teams with a view to establishing the right scale and platform for future growth and sustainability.

"We must ensure that Shepherd Construction operates as efficiently as possible to meet the demands of today's market and safeguard the long term future of the company and its workforce.

"We will do everything possible to minimise potential redundancies and prioritise the welfare of staff affected by the consultation throughout."

Shepherd Group, headquartered in Huntington, employs 3,200 staff across three divisions made up of Portakabin, Shepherd Group Engineering, and Shepherd Group Built Environment, which houses the Shepherd Construction business.

The staff consultations come a month after rumours in the construction industry hinted at Surrey-based Wates looking to buy part of the Shepherd Group.

While Portakabin, Shepherd Homes and Shepherd Group Engineering, which is made up of Portasilo and Portastor, were not reportedly part of the talks, Shepherd Construction, Shepherd Engineering Services and Shepherd FM, all within Shepherd Group Built Environment, were said to be part of a potential deal.

Neither Shepherd or Wates commented on the rumours, which have since fallen quiet.

Earlier this year up to 80 job losses were announced at Portasilo and Portastor as part of a cost cutting drive to address "very difficult trading challenges".

However, working alongside the union Unite, nearly all redundancies were negated, with some taking voluntary redundancy and others finding alternative work elsewhere in the Shepherd Group, resulting in five compulsory redundancies.

In its latest set of financial results the entire Shepherd Group reported flat earnings of £10.1 million off the back of falling revenues, down to £686 million from £748 million in 2013.

The group hailed Portakabin as its "primary source of quality earnings".