WesTrac to trim 630 jobs as mining sector takes another blow

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Worker at WesTrac Image credit: flickr.com User: drewC2009

Heavy machinery distibutor WesTrac  has announced its plan to commence a major cost saving operation within its structures in order to remain competitive on the market.

Worker at WesTrac Image credit: flickr.com User: drewC2009
Worker at WesTrac
Image credit: flickr.com User: drewC2009

According to the media release revealing the company’s estimates, the restructure will result in a reduction of approximately 630 job positions within the next month, with additional cost saving measures such as natural attrition and reduction in contractors to be implemented as part of the program.

The redundancies will be implemented at a cost of $12 million dollars, on top of the $8 million already spent to cut 375 job positions at the company’s NSW/ACT operations earlier this year.

WesTrac, which is a subsidiary of Kerry Stokes’ Seven Group Holdings, has already implemented a series of cost saving initiatives across the mining and construction industries in order to streamline the costs, but these measures proved to be insufficient as the company failed to reach its financial objectives.

AMWU accused the company of breaching the promise it made just two months earlier, when workers were told the company would not slash positions if they took a pay cut, as reported by Yahoo news.

Adertisement

“They made certain commitments to the members on the job about taking a lower wage for job security, only two months later they get sacked,” said AMWU’s Steve McCartney.

Giuliano Sala Tenna from Bell Potter Securities says WesTrac is not the only company experiencing financial difficulties.

“This is something that is happening across the sector,” he said.

“The larger miners are looking to reduce costs and one way to do that is obviously reduce their spend with external service providers and look at making some consultants redundant and bringing it in-house to reduce operating costs.”

The company, which distributes heavy machinery manufactured by Caterpillar, will be left with a workforce of around 3,350 in Western Australia, New South Wales and the ACT from following the restructure processes.

WesTrac parent company, Seven Group Holdings, has downgraded its profit expectations for this financial year, with estimates showing reduction in profits by 30-40% compared with the previous financial year.