Page last updated at 15:22 GMT, Thursday, 2 April 2009 16:22 UK

Cashmere firm confirms job cuts

Johnstons mill at Hawick
Johnstons said it was disappointed to make the cuts at its Hawick plant

One of Scotland's leading cashmere companies has confirmed plans to cut 40 jobs at its plant in the Borders.

Johnstons of Elgin said the losses at its Hawick site were necessary as it was facing an "unprecedented fall in worldwide demand".

Roxburgh MSP John Lamont said it was a "devastating blow" as it followed a number of similar announcements.

All of the redundancies are being sought at the company's Hawick plant, with its Elgin mill unaffected.

Managing director James Sugden said it was "extremely disappointing" to have to make the cutbacks.

I have spoken to the management and I know how difficult this decision has been for them
John Lamont MSP

However, he said incoming sales were down about 25% and the company expected the pattern of reduced demand to continue.

He said that despite some help to exports due to the weak pound, he did not see the outlook changing for the "foreseeable future".

Mr Lamont said he hoped every possible assistance would be offered to the staff involved.

He added: "I have spoken to the management and I know how difficult this decision has been for them.

"Let's hope they can weather the rest of this economic storm."

Serious challenges

Borders MP Michael Moore has written to Chancellor Alistair Darling and Scottish Finance Minister John Swinney to highlight the situation.

He said: "The knitwear industry in Hawick and the rest of the Borders competes on a world class basis.

"These are not businesses unused to serious challenges and highly competitive markets, but the combination of a financial credit crunch and the global recession risks undermining even the strongest of companies.

"Given the scale of intervention to support the financial sector, which is absolutely vital, it is now time that similar energy was put into supporting the manufacturing industry as well."

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