Britain’s second biggest contractor Laing O’Rourke is to make “significant” job cuts in major shake-up of its UK and European business.
At the same time, chief operating officer for construction Europe Tony Douglas is understood to be about to leave the company.
Laing O’Rourke chairman Ray O’Rourke told staff in an email that there will be “significant” job cuts at the firm. Many of the job cuts will be in professional, management and support roles, as the firm attempts to remodel itself as a low-cost supplier.
Former Carillion executive director Roger Robinson has been drafted in to oversee the restructuring.
“These proposals are a critical step in future-proofing our business. We need to ensure we have a tight rein on controllable costs.”
Ray O’Rourke, Laing O’Rourke
In a statement the firm said Robinson will chair Laing O’Rourke’s board meetings for the European Construction and Infrastructure Services business streams, “ensuring the constituent businesses work together seamlessly to seize opportunities and deliver best value for clients”.
Douglas, joined the firm from airport operator BAA in August 2007.
Robinson joins Laing O’Rourke from Carillion after 10 years with the Group where he had responsibility for infrastructure, international, commercial and health and safety matters. Prior to this he was contracts director at Tarmac Construction, and subsequently became managing director of its civil engineering, international and rail businesses.
“The industry’s most challenging period is still ahead and all companies will have to respond accordingly,” said O’Rourke.
“A critical step”
“These proposals are a critical step in future-proofing our business, as contract pricing has become the most influential factor in many clients’ decision-making process - we need to ensure we have a tight rein on controllable costs to compete effectively in winning work.
“We will review and consolidate activities within our European functional and technical support activities. We propose that a large proportion of the roles falling away will be within the support functions and management layers across our business units, the corporate centre and as a result of projects coming to a natural end.”
“I believe we will create a resilient set of businesses better equipped to ride out the current storm and emerge in a stronger position.”
Ray O’Rourke, Laing O’Rourke
“The suggested changes will create a more efficient and effective organisational structure with the appropriate levels of professional resource necessary to achieve our current and medium-term business priorities. This will also deliver a substantial reduction in our annual operating costs, improving our competitiveness and business performance.”
“We must constantly challenge ourselves to be more efficient in everything we do to improve service delivery while reducing our cost to serve. By anticipating the tougher trading conditions over the next 12 months and taking decisive action now, I believe we will create a resilient set of businesses better equipped to ride out the current storm and emerge in a stronger position,” O’Rourke said.