Two hundred jobs are being risked after Balfour Betty has made an announcement regarding its plans to completely shut down three offices. The regional offices that are going to be shut down by Balfour Betty are located in Rochdale, Doncaster, and Dartford. The proposed closure of these three regional offices is going to go forth as part of a review on the viability of the UK construction business.
When questioned about the reason behind closing down the various offices located throughout the UK, Balfour Betty stated that the primary reason why they will be shutting down the offices that are located in Datford is due to the fact that there is an insufficient amount of construction activity that is being performed out of that regional office. They stated that keeping the base open, with the lack of work that it is experiencing is simply crushing their overhead.
Balfour Betty has admitted that by shutting down the regional office, that this closure can result in a smaller amount of people losing their jobs, and relocating. According to employment statistics given by the firm, there are roughly anywhere between fifty to ninety people that work in the various firms. However, it is understood that in total there are about two hundred staff members that are employed across the three separate consultation offices.
Balfour Betty stated that the three offices are simply costing too much to run, and there is not enough work that is being generated to help the offices remain open. The amount of money that was spent on the three offices collectively was £120m, or in terms of the UK regional business figures, the costs being spent to maintain these three offices was roughly eight percent. In comparison to the costs that were being generated to keep the offices open, they generated about £1.5bn in revenue last year, in 2012.
The closures of the three different offices are being performed as a result of a £50m profit warning that was given to the firm in April. At this same time, the group was seized control of by Andrew McNaughton. Mike Peasland who was the former chief executive for the organization decided to step down in the role that he played in the company to become a managing director within the regional business. This is where £38m of the £50m hit the profits of the company were located.
The firm has not appointed Nick Pollard who is a former Bovis boss to lead the construction business forward. Pollard will assume his role as the chief executive for the company on the 17th of June. To some workers it comes as no surprise that further cutbacks are being made. Just last year Balfour Betty had announced its plans to restructure the operations that were held in the United Kingdom. At the time of the announcement, there were office cut backs. Teams were cut back from seventy five individuals to thirty seven. The cutbacks at that time results in 650 people losing their jobs.