Hitachi Rail plans to refurbish its factory at Newton Aycliffe in Durham, UK, to improve its capacity for delivering rail contracts.

The company stated that it will switch to a new workforce model, including a 45-day consultation process with factory employees.

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Hitachi Rail will also invest £8.5m to upgrade the factory with new manufacturing capabilities, which are expected to benefit customers.

Upgrades are expected to make the facility flexible and globally competitive while helping the company receive rolling stock orders.

The company will use the £8.5m to build new carriage welding and painting. This brings the company’s total investment to £110m over the past five for the factory.

Hitachi Rail also plans to implement a core workforce model, which will comprise core, skilled full-time employees. It aims for this to help deliver the existing contracts on time.

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The company launched a 45-day consultation process with employees and the Unite union about the reduction of the permanent staff, which is expected to lead to the termination of 250 employees.

Hitachi Rail manufacturing COO Ross Nagle said: “We’re proud to be investing £8.5m in new train welding and painting capabilities at Newton Aycliffe, making the factory more competitive and sustainable.

“It will allow us to complete the full scope of train manufacturing for our customers across a wider range of products, making us one of the most advanced train building factories in the UK.”

Last month, First Trenitalia awarded a £350m contract to Hitachi Rail for the supply and maintenance of 23 intercity trains for the new Avanti West Coast rail service.

In July, Abellio awarded Hitachi Rail a contract worth £400m ($486m) to supply intercity trains for East Midlands Railway.