The transfer of its base-stock cheque production work from Manchester to Leeds, which is expected to be complete by the end of the year, puts a possible 90 jobs out of 120 at Trafford Wharf at risk. Consultation with staff began last Friday (14 June).
Around 30 positions could be transferred to Liverpool or Leeds or remain in Manchester as part of a small clients services team that will be established, Communisis chief executive Andy Blundell told PrintWeek.
Additionally the company is to outsource "a substantial amount" of the commoditised direct mail work produced in Leeds, which employs around 400 staff, while retaining higher margin and specialised DM work at the site.
Blundell said that an agreement that would see the work outsourced locally had already been signed and would be effective "over the coming months".
He added: "There is over-capacity in direct mail so it makes more sense for us to outsource it. It is not appropriate for us to continue with our DM work in-house.
"These plans are aligned with the group's strategy to reduce its exposure to the more commoditised sector of the print market by focusing on higher margin specialist production and to improve margins by reducing costs and improving capacity utilisation," Blundell said.
Although he did not give specifics, Blundell said that some web production equipment would likely be moved from Manchester to Leeds, while the company also intended to invest in new kit for the site.
He said: "The kit profile will change as we get more specialised in terms of transactional and security work in Leeds. We will need to invest in new kit and we will make way for that by taking kit for commoditised DM work out."
He added that some equipment could also be moved to the company’s 9,300sqm high-speed colour digital printing and transactional printing site in Liverpool, which employs around 350 staff.
Overall the restructure is expected produce annual cost savings of around £4m from 2014 and give rise to a net exceptional charge of £3.5m in 2013, with a cash cost of £2.8m in the second half of 2013 and £0.7m in the first half of 2014.
The company said that the restructure would help it deliver on its target to achieve double-digit margin on sales (excluding pass through) over the next three years while opening opportunities for planned reinvestment in new skills and services.
Blundell said: "For a while we have been clear about three strategic focuses for the group. One is to win new contracts and we have continued to do that, secondly restructuring to make sure our manufacturing engine is appropriate moving forward and finally mergers and acquisitions.
Blundell said that the group's H1 figures, due to be publsihed on 1 August, were expected to be very positive.
"We are on a steadily improving trend and the story is logical and in line with the strategy we have previously announced," he added.
