UK’s top contractor sets aside up to £10m for redundancies ahead of takeover of French services firm Spie.
Amec is embarking on a major restructuring and cost cutting exercise as it prepares to expand internationally.

Three geographical divisions have been created for the UK, North America and Europe. Chief executive Sir Peter Mason has appointed chief operating officers for each arm.

The restructure is part of the firm’s preparations for the takeover of French firm Spie, expected this year.

Analysts say the restructuring will cost £5-10m in redundancy payments. Amec says expected savings will more than cover this. The group said it was too early to say how many jobs would be lost.

Amec’s international business has grown rapidly since 2000 when the group bought Canadian engineering design group Agra and a 42% stake in Spie, an electrical services firm.

About 53% of Amec’s £5bn turnover in 2001/02 will be overseas. This is likely to grow to 62% in 2002/03, when Amec is widely expected to exercise its option to buy the remainder of Spie.

Duncan Guy, Amec’s strategy director, said the restructuring would cut costs by removing layers of management that had been duplicated as the group expanded.

He said: “Over the last 18 months Amec has become an international business. This move will reduce the cost base and redirect spending to make sure we get value for money.”

Guy added that Spie would not slot fully into the European division until it was acquired. The three chief operating officers are David Robson (UK), Peter Janson (North America) and Spie chief executive Jean Monville (Europe). They join John Early who handles Amec’s investments division. All four men are Amec main board directors and will report to Mason. Robson will also oversee Amec’s operations in Asia and Australasia.

Analysts have welcomed the restructuring. John Carnegie, of analyst Schroder Salomon Smith Barney, said: “They have one too many management layers in the UK and North America so this will cut overhead. There’s a lot of trust in Peter Mason to do the right thing.”