BRITAIN’S biggest steelwork contractor is axing about 10 per cent of its workforce as part of restructure plans aimed at stemming losses.

The firm based at Dalton, near Thirsk in North Yorkshire, expects to make 93 job cuts at factories in Lancashire and Derbyshire in the Severfield-Watson Structures division of the business

A Severfield spokesman said: “It is a necessary step to address underlying operational inefficiencies within the business and allow the wider Severfield-Rowen Group to compete effectively in the challenging UK construction market.”

He added that it marked the conclusion of the previously announced reorganisation process at the business to deliver overhead savings of about £2m a year.

Severfield, which employs about 600 workers across the North, gained an international reputation after it helped to build London's Shard, Europe's tallest building, as well as themain London Olympics stadium, velodrome and Arcelor Mittal Orbit viewing platform. It also played a part in Arsenal FC's Emirates Stadium, Wimbledon's retractable Centre Court roof and Heathrow's Terminal Five and Terminal Two developments.

The shake-up comes as Peter Emerson, chief operating officer at Severfield, is due to retire next month after three decades with the steel firm. So far no successor has been named.

The Severfield-Watson Structures business was set up in January to consolidate Severfield-Rowen Structures, Watson Steel Structures and site erection firm Steelcraft Erection Services.

But the whole group restructuring process was overshadowed by revelations that the firm had been hit by a £20m black hole in its accounts from several loss-making contracts in February.

The biggest of these was the Cheesgrater tower in London where Severfield said it would suffer a £10m loss. It is still working to finish steelwork for the landmark project.

In March’s trading update the firm’s woes included a pretax loss of £23.3m on sales of £256m - down from £267m in 2011. However, a £209m order book and ongoing support from its backers gave Severfield cause for optimism.

The firm raised £48m in a shares issue earlier this year to cover outstanding debts and the forecast contract losses.

It also tightened up its construction estimating procedures and risk management.