Lendlease Cuts 15pc of UK Workforce

Global property player Lendlease has decided to furlough 15 per cent of staff across its UK offices in an attempt to tighten up operations within its rapidly growing European pipeline.

The ASX-listed construction and development company has joined a growing number of developers feeling the impacts from the coronavirus, with 240 jobs understood to be at risk.

The move follows Lendlease Group reporting a £300 million worldwide loss in the year to June.

“We remain fully committed to the successful delivery of the impressive pipeline of opportunities our business has secured in the UK, and we see considerable long-term potential for our business here,” a Lendlease spokesperson said.

“But first we must withstand tough local economic conditions that are being addressed by nearly every business in our industry.

“The vast majority of our team will remain in place but, in order to achieve our long-term potential in the UK, we are proposing that our business become a leaner organisation that is fit to face the challenges ahead.”

Lendlease is currently working on a number of major urban regeneration projects, valued at $112 billion, globally as well as in Australia, but has seen operations and supply chains hit by delays due to the impact of Covid-19.

Its global construction operations have been significantly hampered by the pandemic, especially in cities where shutdowns were mandated.

In March, Lendlease was forced to shut down the site of the new Google UK headquarters due to a positive Covid-19 test on site.

The closure was the first major project of its kind to be halted in the UK as a result of coronavirus.

Lendlease said it remained committed to its pipeline of opportunities secured in the UK, where it still sees considerable long-term potential.

The business is currently delivering large-scale urban regeneration projects in Silvertown Quays and Thamesmead in London, as well as a major revamp of a 54-hectare site above and around the new Euston Station.

In February, Lendlease announced Canada Pension Plan Investment Board would partner with the developer on its £2.5 billion ($4.8 billion) Elephant Park urban regeneration project in south London.

It is also pressing ahead with its International Quarter London development in Stratford, east London, a vast commercial, retail and office space project being delivered in partnership with London Continental Railways.

In addition, Lendlease is principal contractor to build the athletes’ village for the 2022 Commonwealth Games in Birmingham, which will accommodate around 6,500 athletes during the games before being turned into a mixed-use development featuring 1,100 homes.

In July, Birmingham council’s audit committee recently flagged the project at a “red risk” rating as they continue to mull the ongoing impacts of the pandemic on a potential schedule.

Lendlease also has vested interests in Italy, which experienced an escalating series of lockdowns following nationwide outbreaks, with two huge projects in the epicentre, Milan.

One is a €2.5 billion ($4.3 billion) redevelopment on 100 hectares for which it signed the contract a year ago, and the other is a €2 billion precinct development on the edge of town that the company bagged in 2017.

In an attempt to fortify its position, Lendlease launched a $1.15 billion raising to fortify its balance sheet as it grappled with the effects of the coronavirus pandemic on its investment and development business across the globe. Its liquidity lifted to $5 billion with the raising.

Lendlease is also on track to finalise the sale of its troubled engineering arm to Acciona early next year, with restructuring costs of $550 million before tax.