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U.K. Budget Cuts Could Spur Layoffs at Design Firm Arup

September 9, 2010

By Peter Reina
This article first appeared on Engineering News-Record

Up to 600 U.K.-based staffers of engineering consultant Arup Group Ltd., London, face possible layoff as construction shows signs of slowing down. The design firm, with a nearly 10,000 -person global workforce, began 90 days of “consultation” with employees over the planned job cuts.

Current market weakness and public sector spending cuts in the U.K. are prompting Arup’s retrenchment, says a spokeswoman. “Projects in the public sector [are being] cut or put on hold,” she adds.

Arup cut 330 jobs last year.

The planned job losses come as this month’s survey of construction-sector purchasing managers reveals a continuing drop in activity. The U.K. purchasing managers’ index (PMI) records growth in construction activity but at a declining rate. “Those who are looking for signs of a slowdown will find plenty to worry about in this month’s construction PMI,” says David Noble, CEO of the Chartered Institute of Purchasing and Supply, Stamford.

U.K. contractors and design firms are bracing themselves for huge spending cuts to be announced by the new government next month. To slash public debt, the finance ministry has asked government departments to reduce spending by more than 25% over the next few years.

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However, to maintain investment in infrastructure, a leading group of U.K. civil engineers is urging the government next month to support creation of a National Infrastructure Bank.

Such a fund would be needed to encourage private investors to contribute to the U.K.’s required $60-75 billion (£40-50b) yearly infrastructure spending, says Tom Foulkes, director general of the Institution of Civil Engineers. “The people of America will be encouraged by [President Obama’s] bold commitment to rebuild and develop the country’s roads, rail networks and airport runways,” he says “The people of the U.K. need that same promise.”

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