Earthmoving company WesTrac is cutting 630 jobs as the mining investment downturn hits machinery sales.
The cuts will be implemented in the next month as part of a restructure of the business, which is owned by Seven Group. The changes will cost $13 million, and come in addition to 375 redundancies announced earlier in 2013 year at a cost of $8 million.
The latest staff cuts will be achieved through a combination of redundancies, a reduction in contractors, and natural attrition as a downturn in the mining sector causes a slump in machinery sales.
“WesTrac has implemented a series of efficiency and productivity initiatives over the past twelve months in an effort to streamline its cost base, but these measures alone have not been sufficient in view of continuing challenging market conditions,” Seven Group said in a statement.
WesTrac distributes earth moving equipment and has a workforce of around 3,350 in Western Australia, NSW and the ACT.
In August, Seven Group said it expected WesTrac’s full year earnings to fall by more than a third due to a slowdown in mining investment, with businesses attached to the struggling NSW coal industry suffering the most.
The group now expects overall full year underlying earnings to be at the lower end of its previous guidance of 30 to 40 per cent below the prior year.
WesTrac would continue to provide services to the mining and construction industries following the restructure, Seven Group said on Tuesday.
Seven Group also owns major stakes in Seven West Media, Prime Media Group and Coates Hire.