Getty ImagesThe UK business of international construction giant ISG has fallen into liquidation, leaving thousands of people jobless.
About 2,200 employees have been made redundant immediately, co-administrator Ernst & Young said in a statement on Friday.
The company, owned by US company Cathexis, has been in financial trouble for some time.
Attempts to reach a rescue deal failed but 200 staff will remain on to help administrators liquidate the company, which holds government contracts worth more than £1bn.
Apple, Barclays and Google are also ISG’s clients in the UK private sector.
Chief Executive Zoe Price sent a widely reported email to all ISG staff on Thursday in which she said: “Some of you may have seen in the media that ISG has filed for administration in the UK.
“I regret to confirm that this is indeed the case.
She added: “I didn’t want you to know this way, the news shouldn’t have been leaked this way.”
Ms Price said staff wages would be paid as normal on Monday and the current situation was due to “legacy issues” related to “significant loss-making contracts” signed between 2018 and 2020.
“Trading these projects has had a significant impact on our liquidity. As a result, despite us being profitable this year, our legacy issues have made it impossible for us to continue trading,” she wrote.
Ms Price said they had made “significant efforts” to find a buyer for the business but had not been successful.
EY also said on Friday that none of the potential buyers could prove they had sufficient funds to support the company’s business and keep it afloat into the future.
“We want to make it clear to our employees, suppliers and customers that this transaction cannot be completed because, despite repeated requests from potential buyers to do so, they have been unable to adequately demonstrate that they have the funds necessary to restructure the business and remain solvent,” they said.
Eight divisions of ISG’s UK business, including its engineering and retail arms, have been placed into administration.
The group, which is currently undertaking a number of government contracts, has now decided to immediately sack the majority of its 2,400 UK staff and cease work on all projects.
According to data analytics firm Barbour ABI, ISG is involved in 69 government projects totalling more than £1bn, including prison refurbishment work for the Ministry of Justice.
It also served as the cycling venue for the 2012 London Olympics.
Ed Griffiths, chief analyst at Barbour ABI, said these ongoing projects, including a £300m expansion of Grendon and Springhill prisons in Buckinghamshire, were just the “tip of the iceberg”.
“The chain reaction this will trigger will be extremely worrying for the hundreds of subcontractors involved,” he said.
But a government spokesman said detailed contingency plans had been implemented and affected departments were working to ensure the sites were safe.
