Workers were told in meetings yesterday that a 90-day consultation period has started and the firm is looking to lose 275 posts out of a total of about 1,800.

Gentoo has blamed three factors which it says have made job losses inevitable: the end of its 10-year programme of renewal schemes across the city; the impact of the recession on the construction industry nationally and the Coalition Government’s drastic reduction in the amount of money being made available to social housing builders.

Gentoo Group chief executive Peter Walls briefed the company’s construction workers at a mass meeting held at Rainton Meadows Arena.

Other members of Gentoo staff were briefed later at the company’s Doxford HQ Emperor House.

He told the Sunderland Echo: “Following the significant economic downturn affecting the construction sector, Gentoo Construction is reviewing its workforce to reflect a reduction in turnover.

“We are experiencing an industry-wide problem in which the North East construction market has been particularly badly hit.

“As a consequence we have opened consultations with our Trades Unions with a view to doing all we can to deal with this difficult situation in a way that will minimise the impact to our staff.

“Gentoo is a diverse group and the rest of our core business remains strong.

“The Group’s main operation, our landlord business, continues to perform well underpinned by strong revenues.”