The UK branch of the global construction giant ISG has gone into administration, resulting in the abrupt termination of 2,200 jobs. EY, the appointed joint administrator, announced the job cuts on Friday. Around 200 employees will be retained to assist in winding down the company, which had been struggling financially for an extended period.
ISG, owned by US firm Cathexis, had been facing financial difficulties due to large loss-making contracts secured between 2018 and 2020. Despite efforts to find a buyer for the business, no potential purchaser was able to provide the necessary funding to keep the company solvent, according to EY.
ISG’s CEO, Zoe Price, confirmed the administration in an email to employees, expressing regret over how the news had leaked to the media. She attributed the company's collapse to legacy issues, explaining that while ISG had been profitable this year, past losses had drained liquidity and made it impossible to continue operations.
The company, which was working on numerous high-profile projects, including government contracts valued at over £1 billion, has ceased work on all projects. This includes significant construction jobs such as the £300 million extension of Grendon and Springhill prisons.
The government's spokesperson has reassured that contingency plans are in place to manage the fallout and ensure safety at affected sites. However, industry experts warn that the collapse will have far-reaching consequences for hundreds of subcontractors and other parties involved in ISG’s projects.
ISG had a notable history in the UK, including its involvement in constructing the velodrome for the 2012 London Olympics. The collapse marks a significant blow to the UK construction sector.
