Fletcher Building workers coming to grips with proposed 1000 job cuts

Thursday, 21 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 workers are waiting to hear about their future in the company after the construction firm proposed a 10 per cent reduction of its workforce.

On Wednesday Fletcher Building announced a proposal to cull about 1000 jobs in New Zealand and a further 500 in Australia across all its businesses.

A worker Stuff agreed not to name said it was a waiting game for staff who were expecting to hear about their futures within the company over the next few days.

“Everyone is a bit shocked but I think the writing was on the wall,” the worker said.

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Fletcher Building received $67.68 million for 9694 workers from the government wage subsidy scheme.

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“There are a lot of rumours going around about who is going.

“I don't think anybody is safe from shovel hands to management.”

E tū negotiator Joe Gallagher says Fletcher Building workers are gutted and worried about their future in the company.

A Fletcher Building spokeswoman said the company had started the consultation process.

'We need to go through and respect that process before we go into any more detail,' she said.

Fletcher Building has more than 35 businesses across five divisions.

E tū negotiator Joe Gallagher said workers were trying to process the news as they had already had their pay reduced since the level 4 lockdown started.

Fletcher Building chief executive Ross Taylor says no part of the business was immune to the job cuts.

'People are gutted and worried about their futures,' Gallagher said.

'Workers were trying to get their incomes stabilised and now have [the proposed job cuts] dropped on them.'

Fletcher Building implemented a 12-week pay plan, where staff who were not working, or working part-time would receive 65 per cent of their salaries for two weeks until April 22. Then salaries would drop 50 per cent for the next month, and by 70 per cent the following month.

In April alone Fletcher Building suffered a $55 million loss due to the Covid-19 lockdown measures.

Fletcher Building received $67.68m for 9694 workers from the government wage subsidy scheme.

Chief executive Ross Taylor said Fletcher Building would honour the scheme, retaining staff through the 12-week subsidy period ending June 26.

Taylor also said Fletcher Building did not qualify for the Government's second round of the wage subsidy, and the company was not interested in financial support from the Government.

Fletcher Building has more than 35 businesses across five divisions.

'It is really important for New Zealand to have strong independent companies and it's not sustainable for all the companies in New Zealand to be dependent on government subsidies for the long term. It just doesn't work. It is important we are independent and on our own two feet.'

Gallagher said the company claiming it did not need Government support was disingenuous after having received the wage subsidy.

He said the company should have waited at least six months to see how the Government's infrastructure spend on 'shovel ready' projects were shaping up.

'Workers were looking forward to getting back on site. Now they have to start thinking about whether they're one of the 10 per cent.'

Another worker Stuff spoke to anonymously said while the redundancies were difficult, the company faced many challenges ahead.

AUT construction management Professor John Tookey says Fletcher Building's decision to cut jobs was inevitable because of Covid-19.

“Fletcher won’t survive this year if they don’t make changes.”

In April alone the company suffered a $55 million loss because of the Covid-19 lockdown measures.

Taylor said the residential market would shrink by about 30 per cent, to 25,000 consents a year.

Work on Auckland Airport's domestic jet terminal and the SkyCity International Convention Centre would be affected, he said.

The convention centre project was given a new long stop date of January 2, 2025 earlier this month, and while the project could be completed within that time frame, Taylor said there may be some delays.

He did not give specifics on which other projects would be affected.

Gallagher said the ripple effect of Fletcher's outlook and job cuts could impact the likelihood of its workers getting another job in the industry immediately.

'It's going to be tough and that's because all the small construction companies are up against the biggest player, Fletcher.

'For too long Fletchers have tried to control the market and monopolise it.

'We're seeing a lot of construction companies go under because they're competing on contracts with such thin margins it takes just one hold up to lose liquidity,' he said.

AUT construction management Professor John Tookey said Fletcher Building's redundancies were a significant blow to the economy, but an inevitable result of Covid-19.

“Fletcher is the bellwether of the building industry in New Zealand. Its health is the industry's health, its problems are the industry's problems,' he said.

'They've seen a contraction in their order as you'd expect. Projects get delayed, cancelled, deferred.

'They're downsizing accordingly and this exercise will save Fletchers a lot of money.'