Unions seek urgent talks with Mitie over plans to axe 480 jobs

Union leaders are seeking an urgent meeting with management at Mitie after the outsourcing group announced around 480 jobs are being axed as part of its turnaround plan.

The group, which has issued a series of recent profit warnings, said the jobs are set to go from its 53,000-strong workforce by the end of its financial year in March.

Unite national officer Rhys Mccarthy said: “We hope that workers are not paying with their jobs because of poor decision-making by senior management and questions over financial auditing.”

In a trading update yesterday, acting chief executive Peter Dickinson, who is taking on the role while boss Phil Bentley is on sick leave, said Mitie was making “steady progress” with its turnaround, but the firm also revealed it expects the costs involved in achieving its savings target of £40 million a year by 2020 to bearound£24minthecurrent year – up from the £15m previous estimate.

It comes weeks after City watchdog the Financial Conduct Authority launched an investigation into Mitie relating to a 2016 profit warning and the way it presents financial information. The Financial Reporting Council has also launched an investigation into Deloitte’s auditing of Mitie’s books.

Mitie laid bare the impact of accounting issues in its fullyear results in June, when it swung to a £58.2m loss after being stung by £88.3m of oneoff costs after a review of its books by KPMG showed practices that were “less conservative, albeit still justifiable, than others in the market”.

In its latest trading update, the group said revenues so far in its financial year are better than expected – at around £1.1 billion for the half-year, 4 per cent higher than a year earlier.

Its order book is 3 per cent higher than at the end of March, at £6.7bn, but it revealed a £6m hit from the recent unexpected loss of a top 20 contract, although it aims to recoup £2m in termination fees.

Dickinson said: “Overall we are making steady progress in the transformation of Mitie. Transforming a large, diverse business such as Mitie is neither linear nor without challenges, but the programme remains on track.”

Analystsatubssaidmitie was continuing to make “good strategic progress” against its broader transformation programme although it added “turnarounds take time”.

Liberum noted that the company’s order book has increased and the pipeline is strong.

“Our view is that Phil Bentley will succeed with his transformation,” the broker said in a note.