Fletcher Building will cut 1,000 positions in New Zealand, approximately 10 percent of its workforce in this country.
The company owns many household companies including PlaceMakers, Mico, Winstone, and Fletcher Living.
A search of the Covid19 Wage Subsidy Employer website says Fletcher BUilding Shared Services received 67,683,717.60 from the taxpayer.
Fletcher Building chief executive Ross Taylor says “while we looked at all parts of our business to remove costs, regrettably we believe we will not be able to support the same number of people.”
“We have to make some very difficult decisions which include looking at reducing the number of people we employ by approximately 10%.”
Ross Taylor says “the impact of the COVID-19 restrictions over the past two months had been significant, especially in New Zealand as a result of the Level 4 lockdown, and that the response of Fletcher Building’s people had been exceptional.”
“I acknowledge this news will be hard to hear and that this is an unsettling time for all involved.”
“Moving ahead as proposed would mean losing talented and hard-working people from Fletcher Building. Any of our people affected will have made a difference to our company, their teammates and our customers; these decisions are not a reflection of their value or contribution.”
“Our New Zealand businesses were closed throughout Level 4, except for small parts of the Distribution and Construction divisions which were asked to provide essential services.”
“We shut down over 400 operating sites at the end of March, quickly and safely thanks to the great work of the whole of our New Zealand team.”
New Zealand Property Editor Anne Gibson told Chris Lynch the news is extraordinary and will take the industry by surprise.
Although she says many Kiwisaver fund managers might have seen this coming given their insight into the industry.
New Zealand Herald Property Editor Anne Gibson talks to Chris Lynch about the job losses.
Ross Taylor says “we restarted our operations on 28 April under Level 3, which was also done safely and effectively through very detailed, site level planning. Again, I’ve been extremely proud of the dedicated response of our people. We have been taking a phased approach to the restart in New Zealand, working closely with our customers and our suppliers as they too return to work and ramp-up their operations.”
Mr Taylor said “Providing certainty for our employees during this period was a priority and the New Zealand Government’s wage subsidy scheme made a significant difference, enabling us to retain our people during that time.”
“Since the move to Level 3 on 28 April, the New Zealand construction sector has been able to return to work. The ramp up has been gradual, with health and safety and physical distancing protocols creating reduced productivity and additional costs across the business.”
Mr Taylor said the impact of the COVID-19 restrictions over the past two months had been significant, especially in New Zealand as a result of the Level 4 lockdown, and that the response of Fletcher Building’s people had been exceptional.The Group’s New Zealand businesses are currently trading at around 80% of forecasted revenues in May, while Australia continues to trade at around 90% of pre-COVID-19 expectations.
Mr Taylor said that COVID-19 would likely have a significant impact on the Group’s markets in both New Zealand and Australia.
“While there is a lot of uncertainty over the economic outlook, we expect COVID-19 will lead to a sharp downturn in FY21 and potentially beyond. Looking to the next financial year, we are planning for an environment that will see a shrinking economy, substantially reduced customer demand across all our businesses and sustained lower levels of productivity.”
Mr Taylor said that the decisions being taken by the Group are difficult but necessary to ensure a strong future for the Group in New Zealand and Australia. “As a major employer, we need to ensure our business is resilient and can support economic growth in the longer-term, just as we have done for more than 100 years. While this has meant having to make tough decisions, we want to thank all of our people for their valuable contribution to Fletcher Building.”
