Billionaire Andrew ‘Twiggy‘ Forrest’s Fortescue mining company will axe 700 jobs, as China‘s property slump hits demand for Australia’s biggest export.
The West Australian iron ore mining boss told 16,000 staff on Wednesday afternoon the company would slash white-collar positions, including senior management roles.
Fortescue informed the Australian Securities Exchange the Perth-based company would implement ‘initiatives’ to ‘simplify its structure, remove duplication and deliver cost efficiencies’.
‘The company must continually evolve to ensure it remains lean, is best positioned to deliver on its strategy and generate the maximum value for shareholders,’ it said.
‘As part of this, approximately 700 people from across Fortescue’s global operations will be offered redundancies, with that process to be finalised by the end of July 2024.
‘Fortescue is grateful for the contribution of all those impacted by these changes.’
Investors reacted negatively as Fortescue’s share price finished the day one per cent weaker at $22.36.
The price of iron ore, Australia’s biggest export, has plunged by a third since reaching a two-year high of $US144 a tonne in January, following the collapse of Chinese apartment building giant Evergrande.
Andrew Twiggy Forrest’s Fortescue mining company will axe 700 jobs
Economists expect more price falls for iron ore, which is used to make steel.
Weaker demand for iron ore has seen Fortescue focus on producing cheaper renewable energy.
The company’s change of direction means it’s unlikely to achieve its goal of producing 15million tonnes of green hydrogen a year by 2030.
Fortescue said it remained ‘resolute in its commitment to be the world’s leading green technology, energy and metals company with a laser focus on achieving Real Zero by 2030’.
‘The company has undergone a period of rapid growth and transition, and as part of bringing together Metals and Energy into One Fortescue, initiatives are being implemented to simplify its structure, remove duplication and deliver cost efficiencies,’ Fortescue said.
In a separate statement, Forrest added it was committed to achieving its decarbonisation goals by 2030 and that ‘without change, improvement is impossible’.
The Perth-based mining company will face a major restructure
‘Being a first mover isn’t easy, but as we learnt 21 years ago, risk is always worth the reward,’ Mr Forrest told the ABC.
‘Part of the reason Fortescue is the highest performing company on Australia’s Stock Exchange is that we do things differently.
‘We do not apologise for requesting people leave their corporate culture behind when they join us… nor will we apologise when we don’t look like everyone else.’
Fortescue has appointed acting chief financial officer Apple Paget to the role on a permanent basis.
Chief corporate officer Shelley Robertson has also changed roles to now fill the position of chief operating officer.