Engineer reveals new restructure will cost up to $70m but says there’s no planned UK job losses
CH2M is going on a UK hiring spree despite announcing plans for another global cost-cutting drive.
In an update to investors posted earlier this month, the $5.9bn-turnover American engineer revealed a new restructuring plan it said would cost $70m in redundancy payments and office closures.
This comes after a previous restructuring at CH2M in 2014 resulted in 1,200 job losses – 100 of which were in the UK – and cost the firm $34m.
But a CH2M spokesperson said the UK would be spared this time round: “CH2M does not contemplate ‘planned redundancies’ for our business in the UK.
“On the contrary, given a number of projects in the UK, Europe and Asia slated for 2017, we’d expect to increase employment as projects ramp up.”
CH2M has recently won a number of major UK contracts in joint venture, including a £350m deal to be the engineering delivery partner for phase one of HS2 and a £200m contract to be the technical partner on the Lower Thames Crossing.
It is also bidding for the £170m contract to be development partner on phase two of HS2.
Overall, CH2M employs 26,000 people worldwide, of which 3,000 are in the UK.
The firm’s new global restructuring plan will aim for a “simplified organisation structure” and “streamlined delivery model” to achieve more profitable growth.
In accounts filed for its third quarter of 2016, CH2M admitted it will incur costs of between $50-70m under its 2016 restructuring plan, which it said will be “primarily related to employee severance and termination benefits and facilities consolidation costs.”
CH2M said its latest restructuring, set to be complete by the end of the first half of this year, is expected to result in annual savings of $90-100m.
According to reports, most of the restructuring will affect administrative jobs in the firm’s North America businesses.
In its results for the three months to September 2016, CH2M reported an operating loss of $108m and a 6% drop in revenue to $1.28bn.