Sixty jobs have been axed at a Shropshire manufacturing company as the economic crisis continued to claim victims across the country.

News of the redundancies at Shrewsbury-based Caterpillar Remanufacturing Services came as ailing high street chain Marks & Spencer announced plans to axe up to 1,230 jobs and banking giant Barclays said it is to cut 400 jobs in its IT departments. 

M&S announced the job losses as it unveiled its worst sales figures for almost a decade. 

Caterpillar in Lancaster Road, Harlescott, said all of the posts it was cutting were either temporary or contract workers. Bosses said they regretted the decision, but insisted it was vital in order to ensure the long-term future of the plant.

A statement released by the company, which makes machines and engines for the construction and mining industries, said: “Caterpillar Remanufacturing Services in Shrewsbury has released approximately 60 temporary and contract workers, employed mainly by Parkhouse Recruitment, who previously performed roles throughout the factory and offices. 

“This is a result of a re-evaluation of market conditions and production levels.”

M&S said UK like-for-like sales tumbled 7.1 per cent – its biggest sales collapse since 1999 – despite heavy price-cutting in the run-up to Christmas. 

The company, which employs about 70,000 staff in the UK, plans to close 27 stores with the loss of up to 780 jobs. 

Up to 450 more will go from its head office. 

Of the stores to close, 25 are under-performing Simply Food outlets, and two are small, main chain stores selling food and clothes. 

M&S has stores in Telford and Shrewsbury, as well as Simply Food shops in Oswestry and Bridgnorth. No Shropshire stores are affected. It is expected to save the chain £200 million.

Executive chairman Sir Stuart Rose said that the firm believed it was “taking the right action to maintain the strength of our business”.

Meanwhile Barclays said it would try to mitigate compulsory redundancies by releasing contractors, closing vacancies and offering workers the chance to apply for other jobs.

By Russell Roberts