Insufficient work and lack of tendering opportunities have prompted the firm to close down its piling business

Morgan Sindall’s piling business is set to be closed down, with up to 40 jobs at risk.

The firm has blamed the possible closure of the business on insufficient work in the immediate future, while also citing a lack of tendering opportunities. Future piling work will be outsourced.

Consultations with those staff under threat from the move are set to begin soon.

A spokesperson for Morgan Sindall said: “We can confirm that we have commenced consultation with our piling staff regarding the future of this business. All existing piling commitments will, of course, continue to be fulfilled and completed.”

A letter from the managing director of Morgan Sindall, Graham Shennan, was sent to those employees affected. It said: “Over the past few months, we have been conducting a thorough review of our piling business and its potential future workload.

“Having completed this review we have determined that there is both insufficient work secured in the short term, as well as insufficient work available for tender in the medium to long term, for the company to maintain the existing headcount within the piling business.”

Morgan Sindall did not disclose the revenue from its piling business and it is unlikely to contribute a significant proportion of group revenues or profits.

However, news of the potential job losses comes after it was revealed that the company laid off 600 former Connaught employees. Morgan Sindall initially took on 2,500 Connaught staff after snapping up parts of its business last year in a £28m deal.

After first expecting additional revenue of £200m from the social housing firm’s contracts, this was then revised down to £100m but between September 2010 and the end of December, the contracts generated revenue of just £20.9m.