WSP has confirmed that 50 out of 2,250 employees in its UK highways divison will be made redundant in a pre-emptive strike ahead of the government’s October Spending Review.
WSP chief executive Chris Cole clarified the numbers after the company’s announcement earlier this month that it is consulting with staff over redundancies as highways work dries up due to government cuts.
Cole said the employees affected will be “a very minimal number” and some could also be transferred to the rail division, in which WSP reported this morning that it was “successfully increasing our profile”.
“Some skills travel and some don’t,” said Cole. “We have the opportunity to move people around the world as well – we have a much bigger transport business in Europe than here.”
“We have the opportunity to move people around the world as well – we have a much bigger transport business in Europe than here.”
Chris Cole, WSP
WSP published its half year results for the six months up to 30 June this morning and reported a drop in both revenue and profit. Revenue was £354.4M compared with £376.9M this time last year. Profit before tax was £17M, down from £17.7M in 2009. Net debt had reduced from £75.1M in 2009 to £70.9M now.
The consultant said that there remains “considerable uncertainty as to how economic conditions will develop in some of the markets in which we operate”. It added that the UK public sector is showing the “early stages” of a slowdown, but it is confident in the outlook for Sweden, where the majority of the company’s European revenues and profits are generated.
By sector, transport and infrastructure had revenues of £109M (2009:£115.8M) and profits of £5.8M (2009:£7.6M). Environment and energy saw revenues of £40.8M (2009: £43.6M) and profits of £2M (2009: £2.4M).
The reduction in activity in highways was largely attributable to the termination of the Area 12 MAC contract with the Highways Agency in September 2009, said WSP. That contract was for trunk road maintenance and improvements but WSP continues to earn revenues from the tail-off of the work.
Environment and energy is a slowly improving sector, Cole said, with renewables as a particular growth area.
Cole said much would depend on the outcome of October’s spending review, but he hopes to see no further redundancies. He said the firm is recruiting abroad, especially in Sweden, and so the size of the overall WSP Group is unlikely to change significantly over the next 12 months.
UK public spending cuts have “not affected us as much as others,” Cole said. “That’s why we have a diversified business. We’ve all known what was coming for the last nine months. There’s no surprise to it.”
The firm went through a restructuring last year, which saw staff numbers reduced by more than 1,000.