Sir Robert McAlpine to start fresh wave of job cuts

Aaron Morby 9 months ago

Sir Robert McAlpine is set to launch a second wave of job cuts, just five months after it completed a strategic rejig that saw 40 lay-offs.

According to insiders, the contractor is believed to be planning to announce a fresh round of staff consultations for up to 190 redundancies.

If delivered this would amount to a near 9% staff cut.

The move comes just after McAlpine finally handed over its much-delayed Deutsche Bank job in the City of London last month where it is understood to have incurred losses.

McAlpine was unavailable to comment on the plan which it is understood will be revealed to staff this week.

The latest expected wave of jobs cuts would continue the fall-out from the business reorganisation earlier this year which saw a switch from a regional to a national sector-based operating model.

In the senior rejig Grant Findlay returned to take over as executive managing director for buildings after leaving in April 2022.

McAlpine has been battling to restore margins to industry averages after a year of supply chain, labour availability and inflationary pressures eroded profitability.

In the August published results for the year to October 2022, the group delivered a lacklustre 0.9% operating margin, down on the prior recovery year at 1%.

While revenue edged up 16% to £1.09bn, operating profit remained static at £9.6m.

The firm will now prioritise sectors where it has been most successful in a bid to improve margins.

Target markets include healthcare, commercial offices, industrial, as well as the heritage and complex schemes delivered by its Major & Special Projects team.

It is simultaneously growing the rail, transport and nuclear sectors of its infrastructure business.

McAlpine hopes the new strategy will drive profitable growth and minimise its exposure to ongoing geo-political and market risks.

The family-owned contractor said the strategy would see a strong pivot towards infrastructure/cost plus work, away from fixed-price work.

This is expected to bring a step change in mix between Buildings and Infrastructure business over the three-year period.

The streamlining will cost £8.4m over the next 12 to 18 months but is expected to realise annualised savings of £20m when fully implemented through a leaner group support centre.

McAlpine said it was likely that revenues would stay broadly flat over the 2023-2025 period as it transitions to a sector-based delivery model.

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