Contractor cuts staff, mainly in the Netherlands, as part of 拢79m restructure
Royal Bam, the Dutch parent of Bam Construct and Bam Nuttall, is to cut 650 jobs as part of its 鈧�100m (拢79m) cost-cutting drive following 鈧�75m (拢60m) losses on problem projects in the UK and Germany.
In an announcement this morning the firm set out details of an extensive restructure of the business in a bid to cut 鈥渄uplication鈥� and achieve 鈥渆conomies of scale鈥� from a 鈥渟implified structure鈥�.
The announcement follows a bleak set of financial results for the firm. In August it reported a pre-tax loss in the first half of 2014, after impairments and pensions costs, of 鈧�6.6m (拢5.3m).
The results were dragged down by heavy losses in its construction and civil engineering arms including a 鈧�3.8m loss (拢3m) for the UK business
Bam had already warned the market in July that its UK business was one of the the sources of 鈧�75m (拢60m) of losses on problem jobs.
Despite this the UK arm of the firm appears to have escaped job cuts, with Royal Bam saying the job losses would be 鈥渕ainly in the Netherlands鈥� where it has around 9,700 staff.
Royal Bam said the job losses would also be 鈥渕ainly white collar鈥� and 鈥渂ack office鈥� staff.
As part of the restructure it will merge the twelve companies it operates under in the Netherlands into two covering construction and civil engineering respectively 鈥� mirroring the structure in the UK where it operates as Bam Construct and Bam Nuttall.
In Belgium, it will merge its six operating companies into one.
The company has also put in place a management committee composed of its executive board directors; the managing directors under the new structure; and directors of key service departments.
Bam said it expected the changes to result in annual savings of 鈧�100m (拢79m) a year by the end of 2015 and would cost between 鈧�80m (拢63m) and 鈧�100m (拢79m) to implement over 2014 and 2015.
It also said the changes would bring 鈥渋mprovements鈥� in its 鈥渢ending processes and project execution鈥�.
It said: 鈥淎s a result, the quality of new order intake will continue to improve, while at the same time Bam works through its backlog of older projects.鈥�
Rob van Wingerden, chief executive of Royal Bam who was appointed at the beginning of this month, said the changes would 鈥渟trengthen鈥� Bam鈥檚 鈥渃ulture鈥� and 鈥渟harpen鈥� its processes.
He said: 鈥淥ur recent performance shows that we need to change in order to deliver on our group strategy and capitalise on our potential.鈥�
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