Ports and rail group Asciano has started cutting jobs as it proceeds with a restructure, with some employees being asked to reapply for positions as the company merges its rail divisions.
"We're taking some quite aggressive measures, I'm afraid," Asciano chief executive John Mullen said, reported The Australian Financial Review.
Mullen confirmed people who hold similar jobs have been asked to reapply for them as the group's Pacific National Rail division, which moves grain, cars and consumer goods, and Pacific National Coal, which moves coal, are merged into one business to cut costs. But he declined to comment on how many jobs would be lost.
The merging of similar positions means that in some cases, people will end up being paid more, but in other cases will be paid less, Mullen said.
The job cuts are understood to be across the group's operations, mostly in Asciano's Pacific National business, but also in its Patrick ports business and head office.
The restructure led to former Pacific National Rail head and former chief financial offer Angus McKay leaving the company earlier this year.
Asciano's director of corporate and regulatory affairs, Gillian Burrows, resigned from the company last week, although Mullen said her resignation was not related to the job cuts and the company was sorry to lose her.
The cuts come after Asciano told investors in February that it planned to increase cost savings to US$278 million from $139 million by fiscal 2018. Asciano's fiscal 2014 cost-cutting target is $30 million, and it slashed costs by $20.2 million in the first half.
Analysts are generally optimistic about the outlook for Asciano, which last month reiterated existing guidance for "low, single-digit growth" in underlying net profit after tax for fiscal 2014, after coal tonnages rose 22 percent for the three months ending in March.
Some analysts believe the Victorian government's decision to award the rights to operate Melbourne's third container terminal at Webb Dock to the Philippines-based International Container Terminal Services and Australia's Anglo Ports will benefit Asciano because it further fragments the container ports market.
Patrick and rival DP World control most of the market, while Hong Kong's Hutchison Port Holdings has started operations in Brisbane and Sydney.
Hutchison was considered the lead contender for Melbourne's third terminal, and if it had won the operating rights, it would have created a stronger competitor to Patrick and DP World.
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