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Author: Richard Snarey

Published date: 2019/06


It was reported this week that construction and services firm Kier is cutting 1,200 jobs in a bid to achieve cost savings of £55m a year by 2021. BBC News reported that the company would sell its homebuilding business, Kier Living, as well as its environmental and facilities management units so that they can focus on activities such as construction and road maintenance.

The board stated that the FM and environmental services businesses “have limited operational synergies” with the core business. Kier chief executive Andrew Davies said: “These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt. By making these changes we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all our stakeholders.”

Following the news, Building reported that rival contractors are expecting to see a flood of CVs from Kier staff in the coming days due to the number of roles expected to be cut.

While some Kier employees took to social media to brand comparisons to Carillion, which collapsed at the beginning of last year, “not helpful”, it’s difficult to ignore the similarities. In the case of Carillion, a deal with Canadian global real estate and FM services provider Brookfield Global Integrated Solutions (BGIS) to buy a swathe of FM contracts fell through in March leaving 2,500 FM jobs at risk.

Additionally, it was reported in March this year that control of one of Britain’s biggest government contractors, Interserve, had moved to a new company after administrators were appointed. The pre-arranged agreement saw administrators EY installed and assets transferred to a group controlled by Interserve’s lenders to protect all services and jobs.

Brexit uncertainty has been widely reported for its negative impact on the construction industry in particular, but cases like that of Kiers, Carillion and Interserve reveal the detrimental effect it’s having on workers operating in the FM sector too. While organisations have historically used FM companies, with their lucrative contracts, to bolster their portfolios and profits, evidence shows that it’s these non-core assets that are at risk in the face of difficulty.  

In today’s climate, FM workers can find themselves negatively impacted by events taking place outside of their sector. Although it’s beyond the control of the professional, it’s worth becoming more aware of the broader organisation that owns the company employing them, exploring how the organisation is performing, and examining whether its stake in the FM market is core to the business, i.e. is there a robust top-tier management team in place to drive it? It’s only through such awareness that FM professionals can analyse potential risks and, in turn, future threats to their livelihood.