Kier cuts staff salaries by up to 20%

Aaron Morby 2 months ago
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Kier will this week cut staff salaries by between 7.5% for lower pay grades and up to 20% for senior managers.

Davies warns that greater reductions in pay or hours may be needed to respond to activity levels
Davies warns that greater reductions in pay or hours may be needed to respond to activity levels

The pay cuts, which come into force from Wednesday, will run initially until the end of June but could be extended if the coronavirus crisis deepens.

These cuts will impact around 6,500 staff and follow the board’s announcement last week that its top executives had agreed a 20% base salary cut.

Chief executive Andrew Davies also reported this morning that the majority of Kier’s core construction sites remained open, but the board had taken the decision to close Kier Living jobs.

He also announced plans to sell Kier Living and property assets were now on hold.

“Approximately 80% of our sites or workplaces continue to operate, although we recognise that this may change,” he said.

“We continue to receive support from our major customers, including Highways England, the Ministry of Justice and various utilities providers. In line with a number of other companies in the sector, we will pause work on our Kier Living house-building sites.”

Davies said Kier had been forced to take decisive action in the face of the significant challenge posed by Covid-19.

“These decisions have not been easy to take. We recognise that these are unprecedented measures and we will keep them under review during the three-month period.”

Salary cuts banding across pay grades


• 20% cuts for staff grades S2 to M3 – senior managers, senior PM’s, QS’s, commercial managers etc, heads of departments, framework managers

• 15% reduction for grades M2 and M1 –  first-line managers such as site agents, SHE advisors, SHE managers, project managers

• 7.5% cut for grades C4 and C3 – works managers, non-working site foreman/supervisors on salary

S is strategists; M is managers;  C is contributors

In a letter circulated to staff last Friday, Davies warned that certain employees may be asked to take greater reductions in their base salaries and a reduction in working hours, depending on the level of work that remains available.

“Although the majority of the group’s sites remain open, the level of work available to a number of the group’s employees will decrease as a result of COVID-19, and further sites may need to close,” he warned.

Davies added that Kier would to using the Government’s ‘Coronavirus Job Retention Scheme’, under which employees will be furloughed, meaning that they cannot do any work for the group but will be entitled to be paid up to 80% of their salary, subject to a maximum of £2,500 per month (gross).

He wrote: “The scheme enables us to keep our valued employees who will help the group re-mobilise to full capacity in due course. If there is no work for you do (for example, because the site you are working on has closed), we will arrange for you to participate in the scheme.”

In a trading statement this morning Kier said it continued to closely manage its net debt, which remained in line with management’s expectations.

The group has total facilities of £910m, including £700m of facilities which are due for renewal during 2022.

Reported average month-end net debt was £395m for the six months to December 2019.

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