Lendlease will cut more jobs in a major shake-up of the company’s operations by the new CEO, Tony Lombardo.
These cuts will come on top of 4,000 jobs that went with the sale of the company’s poorly performing engineering and services businesses.
The shake-up will see Lendlease consolidate its Australian property and construction business units that previously operated as standalone businesses.
CEO Lombardo announced the changes at yesterday’s strategy day for the company.
Mr Lombardo over the reins on June 1 after replacing Steve McCann, who was CEO for 12 years. He said when he joined that he would undertake a major review of the business, the results of which we saw yesterday.
Before his elevation to the top job, he ran Lendlease’s Asian business, so he is now a newbie to the complex company.
In one the of the biggest shake-ups in the past decade, Lendlease will let go 4,000 full-time staffers. It says this is related to the sale of the engineering business and reduces ongoing “functional support”.
In his slide presentation, Lombardo said there will be a hit of $130 million to $170 million in restructuring costs to the December half year result for 2021-22.
He said these cost savings will benefit earnings in the 2022-23 year.
Investors took the news in their stride – the shares dipped 1.2% to $12.02 as the market realised the current half’s financial performance will again be hit by a series of one off costs – this time from job losses and restructings.
Lendlease plans to create a separate Australian business unit, which will operate in the same way as the other three regions – Europe, Americas and Asia.
At the recent full-year results, Lombardo alluded to the changes, saying that with the bulk of the company’s $114 billion development backlog now offshore – in Europe with $US52 billion and Americas with $US28 billion, it made sense to keep them separate.
But he repeated the group’s commitment to hitting $8 billion in production projects by the 2024 year.
These projects include the two Barangaroo South residential towers in Sydney, the Melbourne Quarter in Southbank, the Elephant Park development in London and the large towers at Chicago in the US.
Lendlease will sell some assets, including its 25% in the Victoria Cross metro station site in North Sydney.
