Plymouth-based Princess Yachts is to slash about 260 jobs, according to reports.

The luxury yacht manufacturer reportedly blamed the government’s autumn budget as well as challenging market conditions for the decision.

The cuts are in development, operational support, quality and various departments related to the manufacturing process.

In a letter to staff leaked to the BBC, CEO Will Green said the past year had seen “the most challenging commercial conditions in the company's history”, adding that the recent budget had “severely impacted” the firm’s recovery plans.

Explaining the redundancies, Mr Green, who became CEO in 2023, said the redundancies were “regrettable” but went on to stress the need “to make the business stronger and more agile”, adding that “the good work” taking place throughout the business “will underpin a more sustainable future”.

He said: “I am confident that these adjustments, together with the progress we have made on our turnaround plans this year, will underpin a much more robust business long-term and allow us to concentrate on what we do best – building the highest quality yachts in the market.”

The firm, which employs about 3,200 people across six manufacturing sites in Plymouth, will carry out a consultation process with about 500 employees who are potentially affected.

In March 2023, the company, widely regarded as one of Britain’s luxury brands, was bought by US investment firm KPS Capital Partners.

But despite a bulging order book last year that was worth more than £750m, the company had faced challenges due to supply issues and inflation.

In 2023, the firm posted a £69m pre-tax loss and went on to announce a small number of redundancies earlier this year.

In response to the latest announcement, a treasury spokesperson pointed out to the BBC that the government had capped corporation tax at 25 per cent.

However, in the autumn budget the government also announced a 1.2 percentage point increase in employers’ NI contributions to 15 per cent from April next year.