Australian property development firm Lendlease has announced a significant reduction in its global workforce, with plans to eliminate approximately 740 positions. This move represents about 10 percent of the company’s total workforce. The decision was communicated in an internal memo, noting that the majority of job cuts would affect its international operations.
Lendlease, with a workforce of around 7,800 employees spanning Australia, Europe, the United States, and Asia, aims to streamline its operations. CEO Tony Lombardo emphasized in the memo that the company intends to concentrate on growing its funds management business and focus on development projects with lower risk and higher rewards. This strategy aligns with the company’s effort to “rightsize” its construction workbook.
Following this announcement, Lendlease’s shares experienced a 3.9 percent decline, a steeper drop than the 0.5 percent downturn seen in the broader Australian market index.
A company spokesperson confirmed the job reduction plan, stating it is part of a strategic five-year plan for the company’s turnaround. The spokesperson assured that this reduction in headcount would not affect the delivery of Lendlease’s projects or its targets concerning work in progress, completions, and funds under management.
The decision to reduce the workforce reflects the broader challenges facing the commercial real estate sector. This sector has been grappling with the residual effects of reduced occupancy rates from the pandemic, as well as the impact of higher interest rates on property values and increased debt-servicing burdens.
In a related move, Lendlease, ranked as Australia’s fourth-largest real-estate investment trust, recently imposed limitations on withdrawals from one of its largest unlisted office funds. This measure is seen as a response to the current economic conditions affecting the real estate market.
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