Kier Group to cut costs with 1,200 job losses
Construction firm Kier Group is to cut 1,200 jobs as part of its plans to simplify the business and save on costs.
The company, which has carried out projects across the West Midlands, said it had completed a strategic review under new chief executive Andrew Davies which identified ways to generate cash and reduce its debts.
The job losses are the result of the Future Proofing Kier programme, which has been accelerated so that 650 full-time employees will have left by the end of this month.
Another 550 are expected to go by the end of the 2020 fiscal year.
The move is expected to create £55 million of annual cost savings from the 2021 financial year onwards.
However this is after a £28 million annual cost for the restructuring in both this year and next.
Mr Davies said: "These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt.
"By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders."
Kier also concluded that its portfolio is "too diverse" and it will in future focus on regional building, infrastructure, utilities and highways.
As part of the renewed strategic focus, Kier will sell off housebuilding business Kier Living, its property development business and it facilities management and environmental services.
The company said it had already received a number of expressions of interest for Kier Living.
It comes just weeks after the embattled firm issued a shock profit warning, with bosses revealing that profits are expected to be £25 million lower than expected.
The company's troubles have made for a busy start to the job for new boss Mr Davies, who only took up the role in April.
He had previously been due to take on the top job at failed Wolverhampton-based outsourcer Carillion, but the group went bust before he could begin.