30 Mar 2012
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Balfour and Mouchel plan job cuts

In a bleak sign of the sector’s plight, Britain’s biggest contractor Balfour Beatty is planning to cut jobs as it restructures its construction division.

The firm refused to say how many jobs are at risk at the 12,000-strong division, but staff have been told that their jobs are under review as it looks to streamline its operations in the UK construction market. The move is part of its plans to make £50 million of savings by 2015, highlighted during its results earlier this month.

Businesses likely to be hit are: Balfour Beatty Construction, Mansell, Balfour Beatty Civil Engineering and Balfour Beatty Engineering Services. The firm has stressed that the current plan will not affect project delivery staff.

The firm said: “To align the resources of Balfour Beatty’s Construction Services UK business to current and future market conditions, a consultation period has commenced with employees …This means a formal process has begun for seeking employee feedback on proposals for change in respect of Balfour Beatty Construction Services UK.

“We do anticipate that there may be some future job losses if, following dialogue with all of our employees, the decision is made to proceed with the proposals for change.”

Meanwhile, Mouchel said it will close 13 offices and restructure the company into two divisions in a bid to save £18 million and “secure the long term viability of the business”, reports Construction News.

The move is expected to result in “minimal” job losses, and was announced alongside half year results recording a £11m pre tax loss on flat revenue of £270m. The consultancy also faces a non-payment claim by two sub contractors for £535,000.

New chief executive Grant Rumbles revealed the plans, which follow a strategic review launched in the autumn. The company is examining options to restructure its balance sheet and debt “to deliver create the platform for our operational plans and for the long-term viability of the business,” he said.

The firm will be realigned from its current four divisions into infrastructure and business services, with the company focusing in the shorter term on its core areas such as highways and water, and existing customers.

Rumbles also revealed that the company’s work pipeline has been slashed by £670m to £1.5 billion “to concentrate on the most profitable opportunities.”