Britain’s biggest consultant Atkins last week revealed that it had made more than 1,000 redundancies since September last year in a bid to remain profitable.
The firm made a pretax profit of £41.7M in the six months to the end of September, up 2% on the £40.9M it made in the same period in 2009.
But the profit came at the expense of 906 jobs across its divisions between October 2009 and September 2010. Staff numbers fell from 16,235 on 30 September 2009 to 15,329 on 30 September this year.
In the last month the firm made a further 100 redundancies at its new US acquisition PBSJ.
Chief executive Keith Clarke said that the firm had long anticipated difficult market conditions leading up to the UK’s Comprehensive Spending Review and had taken “timely action” in the businesses affected, adjusting resources in line with prospective workload.
He also warned that more jobs were likely to go next year as pressure on workloads continues.
“The UK spending cuts are going to be severe and it is going to be a difficult market for the foreseeable future. That has an effect on building and employment,” said Clarke.
“We haven’t seen the bottom of staff redundancies yet.”
“We haven’t seen the bottom of staff redundancies yet”
Keith Clarke, Atkins
In the six months to the end of September, the firm made 270 staff redundant and redeployed a further 250.
Atkins acquired PBSJ, one of America’s leading providers of engineering, planning, architecture, construction, environmental and programme management services on 1 October for $280M (£180M). Clarke said Atkins’ local management team has already begun to “address the cost base of the business” in a drive to improve its financial performance.
Atkins has also recently completed the acquisition of Danish bridge engineering company Gimsing & Madsen. This has added 20 to 24 bridge experts to its Danish business.
Clarke said he saw the Danish acquisition as an example that the firm is still hiring in certain “niche areas”. “We continue to hire aggressively and are adding skills through acquisition,” he said.
Clarke said the firm was also recruiting in nuclear.
“The scale, breadth and depth of our technical skills and our more balanced geographic footprint mean we are well positioned for future growth,” said Clarke.
Robust fees debate with minister
Atkins says it will not sacrifice its margins just to appease Cabinet Office demands for suppliers to cut their rates as part of the government’s efficiency drive.
Atkins is one of 34 tier two government suppliers that is facing a grilling from Cabinet Office minister Francis Maude over fees.
Maude wants the firms to repay cash already earned and offer discounts on work in the pipeline to claw back £800M from fees due to be paid to suppliers this year (NCE 18 November).
But Atkins chief executive Keith Clarke suggested his firm would not buckle under pressure.
“We never discuss what we are going to say to our clients. But I say now, we have not changed our [financial] outlook for the year based on that,” he said.
“We will not do work at a loss. It destroys long-term value for the client, let alone us. I am very firm on that.”
Clarke applauded the government for wanting to be treated as a private sector client. “It is entirely appropriate that it does that,” he said. But he stressed that civils consultants had to be looked at differently to other firms.
“It’s one thing to say [to Maude] ‘I’ve got a contract, go away’ and another to roll over and pretend we make excessive margins.”