- Author, Emma Elgee and Michael Race
- Role, Reporter and Business Correspondent, BBC News
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Consumer goods giant Dyson plans to lay off up to a third of its UK workforce as part of a global shake-up.
The company, best known for inventing the bagless vacuum cleaner, said the designs would ensure it was “future-ready” amid what it called “increasingly cutthroat and competitive global markets”.
However, the move comes after its founder Sir James Dyson criticized British economic policy, and the company moved its headquarters to Singapore in 2019.
Dyson currently has 3,500 employees in the UK with offices in Wilshire, Bristol and London.
CEO Hanno Kirner said the company needed to be “entrepreneurial and agile”.
“Decisions that affect close and talented colleagues are always incredibly painful,” he said.
“Those whose roles are at risk of redundancy as a result of the proposals will be supported throughout the process.”
Dyson moved its headquarters to Singapore in 2019 to be closer to its manufacturing sites and supply chains. Asian markets account for more than half of its sales, and Singapore also has a free trade agreement with the EU.
The company, which also makes air purifiers and hair dryers, among other things, is still highly profitable. It increased its R&D spending by 40% last year.
Dyson said the announcement was a business decision, not a political one, and was the result of a global review.
Last year he said the UK had “deplorable policies” such as high corporation tax and said he would invest more in “modern, forward-looking economies elsewhere” that fuel growth and innovation.
Businesses of all sizes, like households, have recently been hit by rising costs and bills. Corporation tax, which is paid on UK companies’ profits to the government, will rise to 25% from 19% in April 2023.
Dyson said the UK would “remain a vital centre” for the company’s research and development (R&D), as well as being home to the Dyson Institute, which has 160 university engineers.
But one Dyson employee who received the notice today told the BBC that although the physical R&D building remained, “everyone involved in R&D has now left all Dyson buildings”.
“All of this is in stark contrast to James’ promise that R&D will remain in the UK after the Singapore HQ moves. We believe this is clearly to cut costs by using our South East Asian counterparts, who are cheaper to employ,” they claimed.
“Whether that ability returns in the next few weeks remains to be seen.”
In response to the BBC, Dyson said the claim was not “categorically incorrect”.
‘Significant Blow’
Danni Hewson, head of financial analysis at investment firm AJ Bell, said that while the company had made clear its plans were a long time in the making, “there are questions about the future of the UK business from 2019”, when it moved its headquarters overseas.
“The news that British appliance manufacturer Dyson is to cut a quarter of its UK workforce is a significant blow not only to those who will lose their jobs, but also to Labor’s drive to grow the economy.
“This decision is unfortunate and raises the question of whether Sir James Dyson and his company believe the future must be looked elsewhere.”
MP ‘very concerned’
Roz Savage, the new Liberal Democrat MP for South Cotswolds, said she was concerned by the announcement.
She said: “It’s huge. Malmesbury is a close-knit community and I’m sure if people are at risk of losing their jobs then their pain will be felt across the community, local businesses and the local economy will be affected.
“This is potentially very big news and I am very concerned.”
Wiltshire Council leader Richard Clewer said the council would do all it could to support those affected at an “uncertain time”.
Mr Clewer, who is also the councilor responsible for economic development, said he was “extremely sorry to hear” of the announcement, adding that many Dyson workers were based in Wiltshire.
“Huge cost reduction”
Professor Andrew Graves, a mechanical engineer and political scientist at the University of Bath, said people in the industry were not surprised by the announcement and had “been pointing this out for a long time”.
“There’s huge competition around the world for Dyson products and a lot of Dyson products haven’t really been successful recently,” he said.
“They put out two billion to build an electric car in Hullavington and that was withdrawn quite quickly when they realized it was too difficult.
“And also some of their latest products haven’t been great in the market, they’re really struggling on all fronts at the moment.
“It’s a huge cost reduction,” he added.
Professor Graves added that it would be “devastating” for the town of Malmesbury if there were to be large-scale redundancies.
Sir James Dyson fifth on the rich list
Dyson was founded by inventor Sir James Dyson, who is fifth on the Sunday Times Rich List with a personal fortune of £20.8 billion.
It is understood the decision to restructure was made before the general election was called.
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