Port company job cuts leave staff uneasy
Six months into the new chief executive’s tenure, at least 17 jobs have been cut at Lyttelton Port Company.
This is according to Mike Yardley’s column in The Press, which reveals some staff were offered better compensation packages to take “resignations” over redundancies. “One of the casualties of the job cuts, with extensive experience at LPC, alerted me to the sweeping changes last week. He’s decided to blow the whistle, so that his former colleagues are fully aware of the changes afoot”, Yardley writes.
“He’s staggered that LPC hasn’t even had the decency to advise the wider workforce of its retrenchment plans.”
Job cuts at the port have so far only affected non-unionised workers, Yardley writes. But Maritime Union of New Zealand membersare nervous, secretary Gary Horan said.
Its members include logistics, cargo, marine and engineering staff.
“The work force is feeling uneasy. Seeing all these people leaving, it’s natural to think it could spread wider.”
The union was told no staff in collective agreements would be affected by cuts.
They asked for clarification on this after a union member office workerwas let go earlier this year, Horan said. All staff and unions should be kept informed of proposed changes, or it “creates uncertainty”, he said.
“We’re just seeing what’s happening day by day ... we’ve asked the company what’s going on.”
There has been a revolving door of chief executives, at LPC with Graeme Sumner its fifth in as many years.
He joined in September after five years running Airways New Zealand.
Sumner confirmed to The Press that reduced container numbers and revenue below budget meant LPC had to cut costs, causing redundancies. “Additionally, LPC has operated a sinking-lid policy and hiring freeze of front-line port workers since the start of 2024”, he said.
“I have shared this with the workforce, but LPC cannot comment on any individual employment matters.”
The changes had led to cost savings of $6 million a year, Sumner said.
He did not answer questions about the number of lay-offs and if more may be likely, or if better compensation was offered to those who resigned instead of taking redundancy.
Sumner cited the Christchurch City Council’s decision in December not to pursue a path which could have paved the way for selling assets, including LPC.
LPC is the only Christchurch city-owned company whose net profit after tax and dividend expectations is not on track.
Lyttelton Harbour has been bathing in the glare of global media attention, with SailGP’s second and probably final visit to Christchurch over the weekend. The “extreme” marine mammal management protocols, forced on the fleet-racing regatta, all but stole the show. SailGP boss Sir Russell Coutts pulled no punches in his scathing appraisal of how local authorities and iwi have handled the event’s viability, with unprecedented red tape. His blistering broadside will be debated for weeks.
But beyond SailGP, there’s another big drama creating ripples in the port town. Without any fanfare, a quiet revolution is under way at the Lyttelton Port Company (LPC).
Since the start of the year, LPC has taken aim at labour costs and has begun swinging its axe, with at least 17 employment positions already disbanded. One of the casualties of the job cuts, with extensive experience at LPC, alerted me to the sweeping changes last week. He’s decided to blow the whistle, so that his former colleagues are fully aware of the changes afoot.
My informant claims the company is preferring to frame the disestablishment of some of these positions as “resignations” rather than rolling redundancies, with better compensation packages for “resigning” rather than being made redundant. And he’s staggered that LPC hasn’t even had the decency to advise the wider workforce of its retrenchment plans. It has demonstrably failed to frontfoot the lay-offs by publicly signalling the changes. Until now.
LPC’s chief executive, Graham Sumner, has just confirmed to me that a retrenchment programme is under way.
“Due to reduced container numbers and revenue below budget, LPC has had to cut costs, resulting in redundancies,” he says.
Sumner also confirms that in addition to that, LPC has been operating “a sinking lid policy and hiring freeze of front-line port workers since the start of 2024”.
So just how far-reaching are the layoffs? Sumner declined to address most of my questions, but has revealed the retrenchment programme will realise “cost savings of approximately $6 million”.
Half of the port company’s 650-strong workforce earn over $100,000, so to slash labour costs by $6m may well necessitate nearly 10% of the workforce being laid-off.
To date, the job cuts have been directed at non-union staff, shredding 10% of that workforce. But what about the unionised workforce, covered by collective agreements? Sumner declined to outline his intentions, but multiple sources tell me that he is preparing for a fight.
Port management has traditionally been reluctant to challenge the union’s grip. He’s the company’s fifth CEO in as many years, but Sumner has form as a hired gun. In 2022, as Airways New Zealand CEO, he earned the nickname of “the Butcher”.
The port’s retrenchment programme exposes the false sense of complacency that many city councillors leaned into in December, when they spurned any opportunity for LPC’s future ownership structure to be reviewed.
Banks Peninsula ward councillor Tyrone Fields trenchantly opposed the proposal to review and optimise the council’s assets portfolio, let alone enhancing LPC’s growth prospects, by bringing in external partners. During that critical vote, which torpedoed the opportunity for public consultation on optimising the council’s assets portfolio, Fields thundered: “The port means a hell of a lot to me. There’s no compelling reason to advance this business case.”
The council-commissioned strategic review highlighted that improving profitability at the port required changing the “inflexible” labour arrangements with the “highly unionised” workforce.
Many industry reports rank Lyttelton as New Zealand’s most inefficient commercial port, given the high labour costs. The review also clearly warned of the looming capacity constraints on the container terminal, if capital funding cannot be sourced for the Te Awaparahi Bay redevelopment. Capacity will be tapped out in seven years.
Fast forward to today and Fields tells me he has “no regrets whatsoever”, and rejects the suggestion that the elected council has now strangled LPC’s access to capital and project funding for growth.
But Sumner confirms to me, “following the council’s decision in December, there is limited access to alternative forms of capital for any future growth”. So not only has the council hobbled the port’s growth ambitions, but lay-offs are still required, simply to tread water. Those December decisions by council are producing clear, adverse consequences.