Firm looks to reduce costs following £760m acquisition of Australian consultant Sinclair Knight Merz
Global engineering giant Jacobs is undertaking a “significant” restructure of its European business, with the move likely to have a major impact on its 9,000-strong UK arm.
In a statement this week, Jacobs said it had launched a restructuring drive across its business to identify “savings” following its acquisition of Australian consultant Sinclair Knight Merz (SKM).
Jacobs completed its US$1.2bn (£760m) acquisition of SKM last December.
Craig Martin, Jacobs’ president and chief executive, said that as a result of the acquisition the firm had identified “significant opportunities to accelerate savings from the integration of SKM and to reduce structural costs, especially in Europe”.
We expect these actions to result in significant savings in the 2015 financial year and thereafter
Craig Martin, Jacobs
“To maximize these cost saving benefits and maintain a competitive cost structure overall, we have started a number of restructuring initiatives that are expected to impact in the 2014 financial year,” he said.
“We expect these actions to result in significant savings in the 2015 financial year and thereafter.”
Any restructure of Jacobs’ European arm will likely have a significant impact on its UK operations as Jacobs’ 48 UK offices make up 71% of the firm’s offices in Europe.
As of September 2013, Jacobs and SKM had a combined UK staff of 9,218, of which 1,701 were chartered staff, but it did not say if this was set to change as part of its restructuring plans.
In the year to 27 September 2013, Jacobs’ European arm accounted for 18% of the firm’s global business, with revenue of US$2.1bn (£1.2bn) contributing to the group’s total revenue of US$11.8bn (£7bn).
The announcement came as the firm reported a fall in post-tax profit to US$84m (£50m) in the three months to 28 March 2014, down from US$104m (£62m) over the same period last year.
The fall came despite a rise in revenue to US$3.2bn (£1.9bn) in the three months to 28 March 2014, up from US$2.8bn (£1.7bn) over the same period last year.
Martin said: “While second quarter results included several unusual items, the underlying fundamentals of the business remain sound.”