Fletcher Building: Placemakers, construction division affected by job cuts

Friday, 22 May 2020

The Government is urged by one union leader in the construction sector to 'crack on' with so-called 'shovel-ready' projects.

Fletcher Building has started its consultation process on plans to reduce its workforce by 10 per cent.

Its chief executive Ross Taylor said no part of the business was immune to the cuts, as the country's largest construction company looked to slash 1000 jobs in New Zealand and 500 in Australia.

Sources within the company have confirmed workers in Fletcher Building's distribution construction, distribution and building products divisions have already been notified of the redundancies.

One source said Fletcher Building was looking to cull 400 jobs at Placemakers, which employs about 2100 across 61 stores.

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Placemakers staff will be affected by Fletcher Building's redundancy plans.

Fletcher Building has more than 35 businesses across five divisions.

Those divisions are heavy and light building products, laminates and panels, distribution New Zealand and distribution Australia and construction.

Placemakers was under Fletcher Building's New Zealand distribution division.

A Placemakers worker who Stuff has agreed not to name said all its stores had been impacted by the redundancies.

First Union spokesman Jared Abbott said while he was aware of job cuts at Placemakers he hadn't heard how many.

Abbott said Easysteel and Laminex, under its laminates and panels division, were also impacted.

A source said another large part of the business to be impacted was the construction division, with 200 jobs facing redundancy.

Amalgamated Workers Union national organiser Maurice Davis said while he had not heard about the 200 jobs being axed in construction, it was likely Fletcher Building was getting rid of its large numbers of its labour hire staff for its delayed projects.

Fletcher Building has assured staff no one would leave the business before June 26, when its 12-week wage subsidy ends.

'The rule of thumb is [labour hire staff] are usually the first to go,' Davis said.

Another source close to Stuff said workers at Winstone Aggregates in Fletcher Building's heavy building products division had been informed their jobs were on the line.

A Fletcher Building spokeswoman said the company would not give detail on the affected roles while its consultation period was under way.

Fletcher Building has assured staff no one would leave the business before June 26. That would make 12 weeks from when it received a wage subsidy payout of $67.68 million.

Fletcher Building had put forth a number of projects for consideration to the Infrastructure Industry Reference Group.

The construction firm suffered a $55m loss in April because of the Covid-19 alert level 4 lockdown.

JB Were investment strategy group head Rickey Ward said Fletcher Building was “living proof” of what many companies were facing.

'It is very hard when you have no revenue but have costs. You have a future now that is uncertain so you need to position your business to go unscathed within that environment which sadly comes at the cost of some human capital,' Ward said.

'[Taylor] is not callous, he's not that sort of character. Yes, he wants to run an efficient business but first and foremost he's got to make sure it survives future periods.

'This is just preparing a business that is going to be impacted right across the board for a period of time.

'If I was in Ross's position I'd be going through what projects do I have in my book to be done and signed agreements to complete — which ones of those are likely to proceed and how do I reconcile my workforce for those.'

Earlier this week the Government said it would announce which major 'shovel ready' infrastructure projects would receive its fast-track funding “within weeks”.

Fletcher Building had put forth a number of projects for consideration to the Infrastructure Industry Reference Group.

Ward said the company would rely on the Government's infrastructure funding for its shovel ready projects to come through.

Ward said the Government needed to give greater detail around when and what and how they would be required to be done.

'The longer you delay things, the higher the charge for corporates to keep funding for people to sit around twiddling their thumbs. You need to get things moving,' Ward said.

'It's very hard to run a business today for those uncertainties of the future. One would expect soon as the Government comes out with clear guidelines then people like Fletcher will be able to go out and reemploy people as they need.'