Exclusive: A drive to cut costs and “take more control” of budgets at Amey saw nearly 2,000 roles disappear from the company last year, its boss has revealed.
In an exclusive interview with Construction News, chief executive Andy Milner said Amey’s redundancy programme combined with its decision to suspend recruitment across the business in 2016 saw the equivalent of 2,000 roles taken out of the company.
The news comes as Mr Milner revealed that more than £50m was taken out of Amey’s cost base as part of the Ferrovial-owned firm’s Fit for the Future restructure programme.
Mr Milner said: “As a diverse organisation we needed to exercise more control and get the costs down; in order to do that we removed 1,000 people from the business.
“Add to that the fact that we stopped recruitment, almost 2,000 roles probably disappeared from the company last year.”
The company said the figure consisted partly of workers made redundant, and from those workers that had decided to leave the business but were not replaced due to the recruitment freeze.
Mr Milner was named chief executive in March last year, taking over from Mel Ewell who had spent 15 years at the firm.
Three months later Amey reported a 77 per cent fall in pre-tax profit for 2015.
Full interview: ‘We had to take a year of pain’
Amey’s chief executive reveals what really happened during a turbulent 18 months at the company.
During 2016 Mr Milner launched the Fit for the Future programme: a fundamental overhaul of the firm’s operations, including a restructuring of its management team and the removal of £50m from its cost base.
According to the accounts for the year ending 31 December 2016, the company’s contracted workforce was 18,541 people down from 19,895 at the end of 2015.
This included the removal of 104 members from the company’s management and administration team.
Mr Milner said: “We took roles out of the business from all levels but a lot came out of senior management team and there was a lot out management across the business; we effectively took a layer of management out of the business to create that visibility.”
Commenting on the process, Mr Milner said it was a “very painful process” for the firm but said Amey was “sympathetic” to staff, offering many early redundancy.
The costs of the redundancy programme and associated reorganisation costs totalled £17.3m for the year ending 31 December 2016.
In July, Amey posted a pre-tax loss of £43.9m for the year ending 31 December, including a £77m operating loss in the company’s highways division.
However, Mr Milner described the results for 2016 as an anomaly.
“Last year had to be a year of pain, and we had to take that pain on the chin,” he said.
A recent update from Amey’s parent company, Ferrovial, revealed Amey had an operating margin of 2.4 per cent for the six months up to 30 June 2017.