MORE jobs and offices are to go at Mowlem as new chief executive Simon Vivian continues his shake-up at the loss-making contractor.
Mr Vivian, who joined last summer to replace Sir John Gains, finished a strategic review of the firm in January. He discovered a series of accounting black holes that led to an exceptional charge and other one-off costs.This plunged the firm to a £15.3 million pre-tax loss in 2004 from a £45 million profit last time.
Mowlem will spend £6 million this year restructuring its construction services division, which has already undergone one round of change which will split it into three divisions.
Mr Vivian said the axe would fall at the construction arm in an effort to produce annual savings of £5 million.He said: 'The bulk of the losses will be in management and there will be office consolidation as well.'
One insider said directors at Mowlem's building and civils business were being asked to reapply for their jobs and half of the 40 directors were to be dumped. He added: 'Morale is not good.'
Mr Vivian defended the appointment of former construction services boss Willie Smith as the director of its group risk management team.
This team will be chaired by Mr Vivian and will include new finance director Paul Mainwaring and group commercial director Peter Lewis.
Mr Vivian, who will decide by June whether to pull the plug on its £60 million turnover building arm in New South Wales, said: 'A lot of the problems at construction were in building and were not part of Willie Smith's business until it was merged a year or so ago.'
The risk board will assess whether projects, including PFI schemes, are worth bidding.
Mr Vivian said the board would become involved on jobs over a threshold to be set at somewhere between £5 and £10 million. He is hoping it will avert the kind of problems its building arm in Australia suffered when it was hit with a £12 million charge on jobs in Sydney.Mr Vivian said: 'They took too much work.'