UPDATE 9.05am: The axe has fallen at Rio Tinto's regional head office on St Georges Terrace, ending weeks of speculation, with the company yesterday laying off as many as 40 to 50 senior executives.
As flagged by WestBusiness last week, Rio has followed through and launched a new wave of restructuring as part of ongoing efforts to slash up to $5 billion from its global cost base.
It is understood yesterday's job cuts follow on from last month's division restructure announced by new iron ore boss Andrew Harding. The restructure saw Pilbara operations president Greg Lilleyman shift out of iron ore into a newly created role of Rio global head of productivity while several other senior iron ore executives at the chief operating and chief development officer level, such as Dale Harris, Tom Palmer, Andrew Kite and Denise Goldsworthy, have departed.
Part of Mr Harding's effort to flatten the structure of the iron ore division, yesterday's round of redundancies targeted executives one level down, at the general manager and manager level.
It is understood Rio will seek to redeploy as many people as possible, although most are expected to leave the company. At that level, Rio managers can be responsible for internal budgets of $100 million or more, and it is understood the changes are directed at moving spending responsibility further up the management structure, rather than just saving on the wages bill.
In addition to the senior managers, a small number of support staff attached to their sections are also understood to have lost their jobs.
A Rio spokesman would not comment on the restructure last night.
It is understood most affected staff were told their positions had been made redundant in meetings during the day, although sources last night said Mr Harding was yet to advise his remaining staff of the extent of the restructure.
It is unclear what implications the latest round of job cuts will have on Rio's expansion plans. The company is due to hit its planned 290 million tonne a year Pilbara run rate in the September quarter. All the required infrastructure is in place.
Rio's board still has to sign off on a push to 360mtpa and was expected to make a decision on the estimated $5 billion plan by the end of the year, although the company has been under shareholder pressure to return surplus capital, rather than invest it in growth projects.Rio shares were up 84 cents, or 1.57 per cent, to $54.39 at 9.05am.