CityCare to sack up to 100 people

Christchurch City Council-owned company CityCare is laying off

100 staff nationwide due to an ‘‘unexpected decline in business’’.

A confidential email to staff, obtained by Stuff, says the company plans to lay off 24 staff in Christchurch and CityCare has confirmed the total figure nationwide is almost 100 – 6 per cent of its workforce.

A CityCare staff member, who did not want to be named, said the layoffs were because the organisation was too ‘‘top heavy’’. She said one of those being laid off had worked for the company for

33 years. Another had worked for the organisation for 25 years.

The staff member said the changes had been quietly happening ‘‘over the last month’’.

CityCare maintains the water pipes for 25 per cent of New Zealand properties and has a lucrative contract with Watercare in Auckland. The company also does roading, landscaping, property maintenance, building construction, property management and traffic management, among other things.

CityCare chief executive Onno Mulder said the firm had little choice but to lay off staff due to an unexpected decline in business.

‘‘We expected this to have turned around by now but there are few indications of any tangible reversal of the trend over the next 6 to 12 months so we have been compelled to reduce costs and to quickly right-size the business, in order to push through this difficult period.

‘‘Rectifying the current situation requires us to relocate, redeploy and to make some redundancies. While this is highly regrettable, we have worked hard to contain the situation so that the changes are likely to impact less than 6 per cent of our employees and I am confident that acting now and acting swiftly will enable us to deliver a stronger platform for future growth.’’

He said CityCare had successfully split the business into three components – Water, Property and Civil – which had helped secure big contracts in South Auckland and with Christchurch International Airport.

The leaked email, entitled Change proposal overview for Citycare Civil April-May 2018, explained that ‘‘almost every team is impacted’’.

The email said that ‘‘this has come about off the back of significant market downturn in Canterbury and projected worsening of this situation – requiring us to take action to reduce our costs.’’

The layoffs included a number of managers, an adviser, a receptionist, a surveyor and a reduction in the roading and trucking teams. The email also stated that recent vacancies would not be filled in roles including project management, estimating, site engineering and client management. Staff are then asked for hints on how to reduce costs or make more money.

‘‘Overall this is a significant change impacting salaried and waged staff and we welcome your feedback on these proposed changes. If you have other ideas as to cost reductions or revenue creation, please let us know.’’

In November last year Stuff reported that CityCare undershot all its financial and work safety performance targets, but Mulder enjoyed a significant pay rise. Revenue and profit were down, but a higher dividend – still below target – was paid to the city council by raising debt levels, also breaching targets.

Mulder received an ‘‘incentive pay’’ of $163,000, receiving a total pay for 2017 of $710,000.

CityCare’s after-tax annual profit in 2017 was $3.5 million compared with 2016’s $6.8m and the forecast target of $8.4m.

CityCare also undershot its safety target by 5 per cent.

At the time Mulder said CityCare was moving out of several contracts and dealing with an industry-wide tightening of the construction market in Canterbury.

‘‘We have been compelled to reduce costs.’’

CityCare chief executive Onno Mulder