Opinion: Balfour axe just the start of job cuts

Aaron Morby 11 years ago

Balfour Beatty’s decision to cut jobs through wholesale changes to its operations is a bleak warning to all.

The industry is being tipped into yet another round of restructuring and job losses, with austerity measures hitting building divisions hardest.

It doesn’t come as a shock, but a major industry readjustment is in the offing.

Main contractors have complained about dreadful margins for months and firms like Laing O’Rourke made cuts to overheads last year.

There has been a valiant effort by many firms to put on a brave face about current workloads and talk up the market. That false dawn has passed.

The fact is Government attempts to stimulate growth were well intentioned but ignored the plight of the building sector where firms most deserve help because they are teetering on the brink.

Big infrastructure won the argument for a share of limited resources – helped by its call for long term money rather than immediate spending.

The failure to grasp the serious plight of the building sector will prove to be one of the Government’s biggest industrial policy mistakes.

What help there is comes too little, too late. For the boardrooms, the missed opportunity of the last Budget proved the final straw.

May Gurney is grappling with the problems and looks set to close its public building division to concentrate on highways maintenance and collecting rubbish.

Reports of Balfour Beatty putting as many as 12,000 jobs at risk are grossly exaggerated. But the day of reckoning has arrived for Britain’s biggest contractor which is set to make its move to bring the business in line with the economy.

It is not the first and will not be the last.

Contractors are having to adapt to a new reality and find new markets and niches.

The cold, hard truth is a 5% drop in predicted workload in 2012 and no sign of further help from the cash-strapped Government which has played its few remaining chips on major infrastructure.

Lean, efficient and effective will have to become the new boardroom buzzwords as contractors adapt to survive in a much tougher marketplace.

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