Workers at a North Oxford distribution centre are fearing for their future of their jobs after their employer decided to close a loss-making business.

Rentokil Initial is to pull out of linen and workwear operations, which means 16 drivers and administrative staff at its depot in Islip Road, Summertown, could face the axe.

Workers at the centre were fully briefed on the decision before the company's announcement early yesterday (January 25), but will not know their fate until May 1, when the textiles section of the firm is closed.

Rentokil spokesman Mark Cox said: "Spiralling costs of running the workwear and linen operations business meant selling the unit was not an option. "There will be a 90-day period during which a full consultative process with customers and affected employees will take place."

Up to 1,700 jobs could be lost nationally if the decision to make all workers redundant is taken.

The announcement came as the number of people claiming unemployment benefit rose by 1.8 per cent to 3,514 in Oxfordshire last month.

Rentokil first announced that it wanted to shed its linen and workwear arm in November 2004, but faced the headache of splitting the operations from the washrooms and dustmats business that it now intends to focus on.

After making a £9m loss in the division in 2005, the separation finally took place last month.

Talks are under way with employees in an effort to find other positions within the company.

Rentokil recently courted controversy by becoming the first company in the FTSE-100 Index of top companies to close final salary pensions to existing members.