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Gleeson jobs face the chop

Future of construction staff in the balance as poor performance prompts strategy rethink

NEARLY 800 staff at Gleeson's construction division are facing an uncertain future this morning following a crunch meeting to decide the company's new strategy.

Group managing director Andrew Muncey called in bosses from the division yesterday (Wednesday) to thrash out details of the restructuring.

Gleeson told the City the move will cost £5 million, with a large proportion of that expected to be taken up by redundancy costs.

Changes planned at the arm will see two of its nine offices closed, the northern and southern operations merged into one business called Gleeson Building, and a reduction in the amount of jobs it bids for.

The firm has also promised a 'substantial reduction of the cost base'and one company insider said: 'The business is being streamlined and there will be some casualties, but we are hoping it won't be too severe.

'Andrew Muncey has his own ideas on how the company should be run and he wants to move it towards a more modern way of working.'

Details of the changes will be unveiled over the next few weeks but Construction News understands the division's bosses have been told to come up with proposals before a further announcement next month.

The move has been sparked by last year's poor performance at the construction business, which saw operating profit in the 12 months to June 2004 crash from £4.6 million to £1.5 million, while margins crumbled by two-thirds to just 0.3 per cent.

Speaking after its results were announced last month, Mr Muncey, who joined Gleeson in 1997 as deputy managing director of the southern construction division, said he wanted to cut £50 million from construction's £300 million turnover.

He added it would no longer chase jobs over £50 million with the average value of jobs it bids for in the future worth around £20 million.

This week Mr Muncey said the strategy was about reducing the risk taken by Gleeson Building.

He said: 'We will only embark on the construction element when we and our customers are satisfied that the right solution and the right price are in place.'