18/02/2009 - 22:00

Engineers start cutbacks

18/02/2009 - 22:00

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THE slowdown in new project and construction activity is starting to flow through to engineering and consulting firms, with GHD shedding at least 60 staff from its Perth office.

Engineers start cutbacks

THE slowdown in new project and construction activity is starting to flow through to engineering and consulting firms, with GHD shedding at least 60 staff from its Perth office.

While GHD would not quantify how many staff members were laid off or which projects and departments were affected, WA Business News understands as many as 100 workers have been cut from the Perth office across all departments.

The cuts are part GHD's downsizing of its global workforce by 5 per cent across all divisions.

"The impact of the global economic downturn has been far-reaching and while workloads in many parts of our business remain strong, we are not immune from the general slow-down in activity globally," GHD chief executive Ian Shepherd said in a statement.

"Many of the countries we operate in are now in recession and we have needed to adjust to the new business climate being experienced by our clients.

"It is with regret that we have had to make some difficult decisions about our people and resources."

GHD is ranked as the state's fifth biggest engineering firm in the WA Business News 2009 Book of Lists, with about 450 engineering staff out of a total 605 employees.

Also last week, engineering and construction firm Clough announced it was cutting 75 staff from its Perth and Bangkok-based operations, with just more than half of that number coming from the Perth office.

In a statement, chief executive John Smith said the company had an obligation to scrutinise its overhead cost base to remain competitive in the current economic environment.

Another operation cutting staff is Brisbane-based Sedgman, which last week reduced numbers at its Perth-based subsidiary Intermet Engineering, having written off $20 million of goodwill value from the WA business it bought almost two years ago for $32 million.

The industry is calling on the government to make decisions on infrastructure and capital works projects to keep work coming through.

Association of Consulting Engineers WA division president David Porter said there were rumours of some large engineering firms changing staffing structures, redeploying staff to other divisions, and asking some of their staff to take early retirement or accept redundancies.

Mr Porter said some of the blame must rest with the banks for taking unprecedented steps to restrict lending.

"It's my personal belief that the banks have to stand up and put their hands in their pocket. They're just not lending money," he said.

"In the private sector you need near enough to 100 per cent pre sale whether it's a building, office, retail, or land development. Which, in effect, is a nice way of saying 'we're not going to lend to you'."

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