More than 20 jobs could be lost at Sheffield Council’s highways contractor Amey as the company has run up debts of £540,000 over the first year of its contract.
The firm has told staff it may need to shed a number of jobs equivalent to 21.7 full-time positions.
In a letter to staff, Amey said although it is meeting targets to resurface and repair roads across Sheffield, ‘the costs incurred are significantly greater’ than projected.
The letter said: “This means that projected losses are expected at £540,000 for the end of the first financial year. In real terms, this could potentially remove 21.7 jobs, to be cut from highway maintenance.
“The current arrangements are financially unsustainable over the lifetime of the contract and are currently presenting a major financial risk.”
Amey said it hoped to reduce costs by making ‘significant changes’ to working practices.
Highway maintenance workers will bear the brunt of the changes, with employees reduced from 75 to 62 - but staff are set to be given the chance of redeployment elsewhere within the firm.
The Star understands much of the overspend has been due to a harsher winter than predicted, meaning greater expenditure on gritting.
Incident support units dealing with urgent repairs will be reduced from 20 staff to eight - although the figure is still greater than the three staff on emergency repairs when the service was run by Sheffield Council.
Staff being redeployed will have their pay protected for two years, Amey said.
Meanwhile, as many maintenance staff as possible are to be trained to drive - compared with just one third at present - to improve efficiency.
Trade unions have been made aware of the situation.
Coun Jack Scott, Sheffield Council cabinet member for environment, said: “We understand there will be no compulsory redundancies.”