MacMahon cuts jobs, senior pay
Macmahon Holdings has reduced staff working hours, cut directors' pay and made another 40 people redundant under restructuring carried out to satisfy its bankers.
The struggling mining contractor earlier this week provided details of the new cost structure to the financiers as part of negotiations for a new banking facility.
The measures come as Macmahon this month finishes up at Fortescue Metals Group's Christmas Creek mine after losing the $260 million a year contract to a rival.
Advisers from 333, a KordaMentha unit specialising in restructuring and turnarounds appointed by the banks, have begun scrutinising Macmahon's new business plan this week.
The company has a three-year $318 million facility with nine lenders. At December 31, $168 million had been drawn. It had cash of $125 million.
Executive chairman Jim Walker said the company had achieved a goal of making $25 million in cuts to its overheads to cope with the loss of revenue.
"We've still got a strong balance sheet, we've still got cash in the bank and we've got a business which is viable going forward," Mr Walker said.
Under the changes, Macmahon staff from June will switch to a nine-day fortnight, cutting the wage bill by 10 per cent. Directors, including Mr Walker, agreed to accept a 10 per cent cut.
Workers identified for redundancy have been notified, and will progressively leave the company over the next couple of months.
"I don't sleep well at night about it but the staff have been very mature in the way they've accepted it and moved forward," Mr Walker said.
Once the latest round is completed, Macmahon will have laid off at least 130 people, or more than 50 per cent of its permanent workforce, since late last year.
The board has also flattened the management structure, removing chief operating officer positions in favour of general managers for business units.
Consultants from KPMG assisted Macmahon with the revamp.
Mr Walker said recruitment of a new chief executive was in the final stage with an appointment expected within weeks.
