Starting from 1 January, the contractor's six regional construction businesses will operate under a single brand, to be called Bluestone. This will be led by Chris Saxton, the present managing director of regional construction.
The aim is to create a £400m-turnover business with a single corporate identity but split into four regions.
Two of the current regional heads, Julian Brand of Sindall and Keith Watson of Snape Roberts will be promoted to the board of Bluestone.
Doug Gray of Barnes and Elliot will become finance director and Martin Pitt of Wheatley will also join the board as commercial director.
There are question marks hanging over the roles of the other four regional directors. The company was in talks this week with Allan Haigh (Barnes and Elliot), John Berry (Stansell), Paul Baxter (Wheatley) and Phil Brand (Hinkins and Frewin) to decide their futures. Morgan Sindall chief executive John Morgan said they would remain with the group.
Saxton said the move was designed to lift margins from the current 1.5% to 2.5% and bring consistency of approach across the business. This would allow Bluestone to offer the same service to clients around the country.
The restructuring is a departure from the regional model under which the businesses' turnover grew from £30m in 1994 to £400m in 2000.
An industry source speculated that the eventual aim may be to sell Bluestone.
He said: "Regional construction is the weak link; it's just not performing as well as Morgan Sindall's other businesses. I think you will see it sold within three years."
Morgan denied that the move was designed to clear the way for a sale of the business and said the group was still committed to regional contracting. He said: "This is designed to improve margins, bring consistency and deliver regionally under a national brand."
Saxton added that the change gave Bluestone the option of taking on contracts larger than the £1-10m range. A move into Scotland was another possibility.