Blair Chappell and Matthew Horncastle, of Williams Corporation, charter private jets to move staff around. Photo / Supplied
Blair Chappell and Matthew Horncastle, of Williams Corporation, charter private jets to move staff around. Photo / Supplied
Last week, New Zealand’s busiest privately owned residential developer said it wanted to cut costs by 15 to 30 per cent and had made voluntary redundancy offers to all staff. So how did that go for Williams Corporation?
The numbers were nowhere near the possible 40 a chief forecast mighttake the offer earlier last week.
Matthew Horncastle, Williams’ managing director, said staff agreeing to the deal had until 3pm yesterday. Only 24 out of 200 staff had agreed to take redundancy.
Horncastle said last week that costs needed to be cut by 15 to 30 per cent so staff were being sent the offer to slice back the firm’s costs.
William is the middle name of the two co-founders and the business has offices in Auckland’s Viaduct Harbour Ave, Tauranga, Wellington, Nelson, and head office premises it recently leased at 2 Cathedral Square in Christchurch where it was founded by Horncastle and Blair Chappell, both aged 29.
On November 8, Horncastle sent a voluntary redundancy proposal to staff here, in Australia, the Philippines and Singapore. Around 120 staff are employed in this country.
Declining sales meant the businesses needed to be restructured or “right-size” and that might include cutting overheads by 15 to 30 per cent, he said.
Last week, Horncastle said he expected there could be a retrenchment of 20 to 60 people but he speculated then it would be on the lower, not the higher side.
Commentators said the offer made little sense because those with the highest skill levels were most likely to leave and disadvantage the business.
Other house-building businesses, particularly franchised systems, are also understood to have laid off staff lately due to fewer house sales.
Rising interest rates and low residential sales volumes are thought to be influencing the market but the slowdown is yet to be displayed in StatsNZ housing consent data.
WW, moored in Auckland, is used by Williams staff to entertain. Photo / Supplied
Horncastle said last week that at the peak of the market last year, the business had sold 800 houses in a rolling 12 months.
“We were aiming for 1600 a year. This year, we have sold 500 houses in a rolling 12 months so we are over-staffed,” Horncastle said then.
“So if anyone doesn’t enjoy their role or doesn’t want to be here, we’ll pay you an extra one month’s pay to take redundancy. We’re planning to restructure our overheads by 10 to 30 per cent.”
The letter said: “It is important to note that no decision has been made about the restructure mentioned above and, prior to any restructure occurring, a full proposal document will be circulated to any potentially affected employees for consultation, discussion and feedback.”
In the year to October 2021, Williams built 761 homes, mostly townhouses. Last year, Williams was second only to the powerhouse G.J. Gardner, which built 1645 homes. Although Williams’ output is less than half the largest builder, it’s been a steep rise. Williams built houses for what might seem like an unbelievably low average of $141,164. It doesn’t include the land.
G.J. Gardner is a franchised model whereas Williams is privately owned. Its output made it the busiest privately controlled, non-franchised, residential builder.
The letter to staff is titled “voluntary redundancy proposal” and was marked “private and confidential”. But a note to media on it said that people looking in from the outside would not notice any difference to the operation if people did take up the redundancy offer.
Redundancies were being offered as a direct result of the current operating environment and market conditions, it said, and senior management was in the process of conducting a full audit of the business to ensure it was continuing to trade safely and responsibly.
On social media, Horncastle has expressed confidence in the housing market: “I think we are at the bottom of the market, or very close, and we will see prices and volumes increase soon,” he wrote last week.
The Herald’s Liam Dann says there may never have been a better time to be young and looking to earn a buck, at least not in his working life.
The Herald’s Cameron Smith put it in his feature for the Rebuilding Better series: “If 2022 were to bear a moniker it would be the Year of the Employee”.
Dann reported on November 2 that unemployment stayed steady in the September quarter at 3.3 per cent, but wage growth was stronger than expected.
