Kier to cut 1,200 jobs as troubled Crossrail contractor slashes costs

Some 650 staff are to go this year with remaining cuts made next year

Crossrail contractor Kier said the move is expected to create £55m of annual cost savings from the 2021 financial year onwards (PA)

Construction and services firm Kier Group is to cut 1,200 jobs and sell its homebuilding business as it seeks to slash costs by £55m a year.

Around 650 jobs are expected to go by the end of this month with the remaining cuts made next year.

Shares in the troubled Crossrail contractor plunged almost 14 per cent after the news, adding to an 85 per cent fall over the past year.

The company has suffered from a tough market for government contracts which has prompted outsourcers like Kier and the now-defunct Carillion to enter low bids to secure work.

Interserve was put into administration in March after creditors rejected a rescue deal while another outsourcing firm, Capita, tapped shareholders for an extra £680m last year after posting a £513m loss.

Kier will sell its Kier Living business, its property development business as well as its facilities management and environmental services as part of moves expected to save £55m per year from 2021.

The company concluded that its business is too diverse and it will aim to refocus on building, infrastructure, utilities and highways.

“These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt,” said chief executive Andrew Davies, who took over the role in April.

“By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.”

Mr Davies had been lined up to take over as boss of Carillion before the company went bust in January 2018.

Aerospace and defence company Babcock, which services the Royal Navy’s submarine fleet, revealed on Monday that it had rejected a takeover bid from smaller rival Serco.

The proposal would have created a £4bn defence outsourcing giant.