Lendlease to cut 740 staff in global purge

Property giant Lendlease is cutting 740 staff across its global business, equal to about 10 per cent of its workforce.

The job cuts will result in a 5 per cent reduction of staff in Australia, with a 15 per cent reduction in staff offshore. The cuts are expected to achieve between $80 million and $100 million in cost savings.

This is the second wave of job cuts under Lendlease CEO Tony Lombardo since he took over from Steve McCann in 2021.Credit: Jessica Hromas

In an internal email to staff seen by this masthead, Lendlease chief Tony Lombardo said the greatest reduction will be in its three international regions – America, Europe and Asia Pacific – “as they align to our permanent shift to being an investment-led company with a leaner operating structure, where resources are shared and not replicated in market”.

“It’s never easy making such big decisions – ones that directly affect so many of our colleagues,” the email said.

On July 1, Lendlease said it had frozen hiring due to the tough conditions for property developers and concerns about rising costs across the building industry.

The move is part of the overhaul Lombardo flagged last November at the group’s strategy update, where he said he’d continue to reduce the cost base and align the workforce around projects and activities that generated the highest value for security holders.

This is the second cut Lombardo has made since taking over in June 2021 from former CEO Steve McCann. That saw 400 jobs go, mainly in Australia, and resulted in $170 million in cost savings.

The ASX-listed Lendlease has a market value of $5.89 billion and operates in three business units: development, construction and investment.

Since taking the reins, Lombardo has shifted the group to be a more investment-led business by growing capital partnerships to boost funds under management to about $80 billion.

In February, Lendlease reported that it had almost halved its net loss of $141 million for the first half of the financial year, compared with a $264 million loss the same time a year ago.

Lendlease is trimming costs and its workforce.Credit: Will Willitts

Property analysts have been closely examining Lendlease since Lombardo took over, at a time when the business had been hit by supply chain issues, rising commodity costs and the sale of the engineering business.

At the group’s strategy day in November, JPMorgan analyst Richard Jones asked if there was any “additional colour on cost out or headcount reduction, maybe particularly with reference to the construction business?”

“I think we’ll continue as a team to look to drive efficiency. We’ve set ourselves some clear portfolio metrics, and therefore we’ll make sure we’ve got the right cost of sales to support that and the right overhead level,” Lombardo said.

Lendlease shares slumped over 4.91 per cent to close the day to $8.13.

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