Dive Brief:
- Australia-based developer and contractor Lendlease has laid off about 10% of its global workforce, the Sydney Morning Telegraph reported Tuesday. A spokesperson for the company confirmed the news to Construction Dive.
- The layoffs affect 740 workers total, or about 5% of Australian staff and 15% elsewhere across the world, with estimates they will save the business AU$80 million ($54.4 million) to AU$100 million in costs, the Telegraph reported.
- In an internal email secured by the Telegraph, CEO Tony Lombardo explained the decision to cut workers was part of “our permanent shift to being an investment-led company with a leaner operating structure where resources are shared and not replicated in market."
Dive Insight:
“It’s never easy making decisions that directly impact our people,” Lombardo said in a statement shared with Construction Dive. “However, they’re absolutely necessary in order to generate more resilient returns for our securityholders and sustainable careers for our ongoing workforce.”
The layoffs should not impact project delivery, schedules or funds under management, according to the Lendlease spokesperson.
Lendlease cut 400 jobs in 2021, mostly in Australia, saving $AU170 million at the time, the Sydney Morning Telegraph reported. This year, Lendlease put a freeze on hiring on July 1, citing a rocky market for property development and rising costs in construction.
Lombardo, who assumed the CEO position in 2021, has repeatedly said that the COVID-19 pandemic hit the firm particularly hard and called 2022 a “reset year.”
In its most recent earnings call, the company reported a AU$141 million loss for the first half of its fiscal year 2023, which it attributed to a U.K. law that forced it to shell out hundreds of millions to remediate residential properties.
It is not clear how many or which U.S. workers would be affected. Lendlease has AU$2.9 billion worth of work in the U.S., as of the most recent earnings report.
