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Skanska begins UK redundancies

Skanska 3to2

Some 125 Skanska UK employees are set to lose their jobs in the company’s latest round of redundancies. 

New Civil Engineer can reveal that Skanska UK has begun the second consultation period on around 125 redundancies as it implements its “laser focus plan” to streamline its UK business.

The new round of redundancies is to affect the general staff beneath leadership team level. It follows “part one” of the consultation period aimed at the senior leadership team which was concluded earlier this year. 

In an internal document seen by NCE, dated 25 May, Skanska UK executive vice president Harvey Francis said it was taking steps to “safeguard the sustainability of the business” and it recognised the changes would cause uncertainty for people which was “very difficult to avoid”.

“We are committed to making sure we consult in a fair and meaningful way, but will also ensure that we do whatever possible to enable the collective consultation to conclude as soon as is practically possible, in order to minimise uncertainty,” he said.

Collective consultations with employee representatives will be held from the 4 June to 28 June across the enabling functions, cementation and utilities, infrastructure and IS, and building and building services. A source said it was proposed that 125 staff would be asked to leave the business at the end of the consultation period.

In January the business announced plans to cut around 3,000 jobs in Europe but mainly focusing in Poland. Poor performance in the country led to project write downs of around £36M for the fourth quarter of 2017.

In March, in an another internal document seen by NCE, Skanska UK president and chief executive Gregor Craig said over recent years, the company had delivered an “unacceptable level of financial performance”, leading to project write-downs in July 2017.

He said to address the root causes of poor project performance, the “laser focus plan” had been formulated last year.

As part of the plan, he said a sector review of the business had been carried out and proposed a restructure of the business subject to consultation with employee representatives.

Referring to the sector review, Craig said in the document it would take a new approach to bidding and the business would now only bid for work in sectors where it could demonstrate an acceptable level of profitability and skills to deliver profitably. He added work would only be in line with its “core values”.

New sectors would be investigated in a “tightly controlled manner” to ensure margins were in line with expectations.

In light of the sector review Craig said the resuhuffle was to ensure the UK business delivered a 3%+ operating margin.

Responding to the new round of consultations a Skanska spokesperson said: “Skanska has entered into a collective consultation process with its staff, following a strategic business review and its previously-announced intention to re-organise its building and building services operations.”

Craig added: ‘We have taken this action so that we are in the best position to provide the service that our customers are asking for, as well as build on our robust order book, strong balance sheet and solid cash position, ensuring that we have a sustainable business that is fit for the future.”

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