Royal BAM Group nv has set out details of the Back in Shape programme for the improvement of its operational and financial performance, including around 650 job cuts out of a total 9,700-strong workforce in the Netherlands.

The Group employs around 5,400 people in the UK via its subsidiaries Bam Nuttall Construction and Bam Construct UK. Last month a Bam Nuttall/ Mott Macdonald jv was awarded a £23 million contract to deliver flood protection for Leeds.  

BAM is simplifying its organisational structure in the Netherlands and Belgium by merging companies. In the Netherlands, twelve companies will be bundled into two companies, one in each of the two business lines 1) Construction and property and 2) Civil engineering. In Belgium, six companies will operate from one company BAM Belgium, across both business lines.

Each of the new companies will be headed by a management team, including directors for Finance and Human Resources.

The other home countries plus BAM International were already set up as one or two companies, which will be assigned to the two business lines.

As a result of de-duplication and economies of scale in the simplified structure, the number of Full Time Employees (FTEs) will be reduced during 2015 by approximately 650, mainly in the Netherlands and mainly in back office positions. The number of FTEs in the Netherlands was approximately 9,700 as at year-end 2013.

The Group said the organisational changes are intended to make BAM more effective externally in its markets and more efficient internally and that the Back in Shape programme will improve BAM’s tendering processes and project execution. The improvement will centre on better insights into project risks and opportunities, financial as well as operational. As a result, the quality of new order intake will continue to improve, while at the same time BAM would work through its backlog of older projects. BAM is aiming to get its results on projects into a 2 to 4 percent range in the longer term.

BAM is also aiming to achieve cost savings of at least €100 million as an annual run-rate by end-2015. There will be an exceptional restructuring cost in the second half of 2014 and the first half of 2015 of €80 million to €100 million.

Rob van Wingerden, who started work last week as the Group’s CEO, commented:

‘Our recent performance shows that we need to change in order to deliver on our Group strategy and capitalise on our potential. So we are reshaping our operational model by strengthening our culture, simplifying our structure and sharpening our processes. That will translate into better project control, a lower cost base and stronger balance sheet. And that in turn will improve our competitive position and create more value for our shareholders.’