DTZ hit by further redundancies, wage and pension cuts
Staff in DTZ's Manchester office are being asked to take a "voluntary temporary" pay and pension cut for 12 months to ease the firm's financial position.
Around 130 staff will go from the UK business, with a small number due to leave Manchester where there have been two waves of cuts already in the past year.
Among the handful of North West staff set to leave the debt-ridden company is Andrew Gardiner, director of office agency, who this week entered a consultation period with the firm over his position.
Gardiner has been with DTZ for 13 years and was one of four office directors there this time last year. Rupert Barron, formerly of Donaldsons prior to acquisition by DTZ, was made redundant last autumn and later joined Colliers CRE.
Ken Bishop and Rob Yates remain in DTZ's office agency department as directors. The team also includes Chris Lloyd, associate director, and graduate James Raspin.
Gardiner is a popular figure on the agency scene and the face of the North West Office Agents Society.
DTZ said in a statement today: "DTZ outlined the impact that deteriorating markets were expected to have on the business in the Interim Management Statement, on March 20. At that time we stated plans to drive out a further £20m in savings by the end of the financial year 2010, on top of the £30m already announced in December. This requires us to take some tough decisions.
"Like all of our competitors, we have been actively taking cost out of the business to ensure we are in the right shape for the market, while retaining our ability to fully-serve clients. For any organisation carrying this out, it is a painful and difficult – but necessary process.
DTZ reported an £11m loss for the six months to the end of October 2008 and expects significant losses for the full year.
The statement went on: "This week in the UK, which includes our group and central services as well as our UK practice, we have started consultation to reduce headcount by approximately 130 roles. Following a full review of all areas of pay and benefits, we have also announced that we are proposing that pension contributions made by the business in the DTZ Group Directors' Pension Scheme for UK Directors and Associate Directors are frozen for 12 months. Historically our benefits in this scheme have been up to 50% higher than our peers.
"Additionally, we are asking UK Directors and Associate Directors to consider a voluntary temporary pay cut to help us keep the number of redundancies down. For those that take part in this programme, we are targeting a minimum 10% reduction from Directors and a minimum 5% reduction from Associate Directors for a 12-month period.
"Leadership listened to staff who have been asking that we consider alternatives to headcount reduction. We understand that this is a significant sacrifice for staff to make and firmly believe we cannot ask for this sacrifice if we are not prepared to do it ourselves. The UK Executive Committee has already volunteered to take this reduction as a minimum, whilst Paul Idzik, Group CEO, has taken a cut to his salary at a percentage well above the suggested levels we are asking Directors and Associate Directors to consider."
John Forrester, head of UK & Ireland at DTZ, said: "None of these decisions are easy. No-one would chose to be making these cuts under normal conditions but we have to do what is in the long-term interests of our clients, staff and shareholders and will help sustain the business through this extremely difficult time."
The consultation for headcount reductions will be carried out over the next 30 days and it is anticipated that the process will be completed by early June. The consultation for the proposed changes to the DTZ Group Directors' Pension Scheme begins on 1 May for 60 days.
