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Redundancies loom at Interserve

Interserve is planning redundancies at its specialist services arm after the company said it was struggling to win work.

Chief executive Adrian Ringrose refused to disclose how many workers’ jobs were at risk but admitted the firm was “cutting costs” and that job losses were “inevitable”.

The announcement regarding potential redundancies is a black mark in an otherwise upbeat mid-year report from Mr Ringrose, who said the overall outlook for the group is optimistic.

He said: “We are definitely positive. We have access to some exciting markets overseas, but equally we have our feet on the ground. There are going to be some bumps in the road.”

Though the company is making cutbacks in its specialist services division – which has several financial sector clients including Kleinwort Benson and Barclays Capital – it has been hiring staff in other areas.

Mr Ringrose said: “Due to different skills or different locations we are unable to redeploy all of our workers, but overall we are a net recruiter.”

He added that there were no plans for the division, which he described as a “core offering”, to close.

In a statement to the stock exchange, Interserve – which had a revenue of £1.7 billion last year – claimed it was resilient to the downturn.

The company said it expected public-sector spending and strong demand overseas to see it through difficult economic times.

Interserve’s recent successes include securing the £310 million Corsham communications centre PFI contract for the Ministry of Defence, as well as being named preferred bidder for a £300 million acute hospital for the Western Health and Social Care Trust in Northern Ireland.

The firm believes its focus on social infrastructure work, which comprises 90 per cent of its future workload, means it will remain buoyant during the economic downturn.

Interserve is also optimistic about its opportunities in the Middle East.

The company said the workload in its Middle Eastern markets – Qatar, Oman and the UAE – had continued to increase over the past four months. The company is also planning to extend into Saudi Arabia.

Beyond the Middle East, Interserve said its equipment services team had improved performance in Australia – due to the nation’s mining boom – and undergone growth in South Africa. It said this had offset the “more challenging” conditions in Europe.