Managing director says back office staff will be cut down after two divisions merge

The new managing director of Morgan Sindall has admitted the firm will have to make a number of back office redundancies after formally completing the merger of the group’s building and civils businesses.

Graham Shennan said there would be some lay-offs but rejected any suggestion that the merging of Morgan Ashurst with Morgan Est was driven by the need to cut costs. He declined to estimate how many jobs would go at the £1.5bn turnover firm.

“There might be a small number in our rail and aviation divisions, and as we have two finance teams and two human resources teams, some cuts will inevitably come to pass here,” he said. “But this is a by-product of the move, it is not a reason to do it.”

Shennan said the move was aimed at targeting the needs of large clients, including BAA and Network Rail, where civils and building work often go together. He said: “It is also something that enables us finally to punch our weight, giving us the size to take on the biggest contracts.”

Shennan said the 4,800-strong firm would target growth in particular in the nuclear, energy and other utilities sectors. The firm has an annual turnover of £250m in utilities work, but will attempt to take business from market leaders such as Costain and Balfour Beatty.

The company is also trying to win tunnelling contracts for Crossrail. Shennan said he was confident the scheme would go ahead in some form, but fears there will have to be “symbolic” cuts to the programme.

The business will be split into six operating areas (see below) sitting under Shennan and overall commercial director Martin Pitt.

Last month parent company Morgan Sindall Group announced that it had increased its forward order book to £3.6bn from £3.2bn.

Morgan Sindall: the six divisions

Tunnelling Managing director, Chris Hughes
Infrastructure (including rail) Managing director, Jag Paddam
Morgan Sindall Professional Services Managing director, John Jenkins
Utility Services Managing director ,Andy Crowder
Construction North Managing director, Danny Murray
Construction South (including aviation) Managing director, Stephen Scard