Several subsidiaries within a large architectural design and consulting group have been placed in administration as part of a corporate restructure, with redundancies expected as part of a response to what the company says are “challenging business conditions”.
The move comes as the construction and building industries continue to struggle alongside a sluggish market. Businesses associated with building and fit-outs, such as this high-end blinds manufacturer placed in administration recently, are under pressure.
HBO+EMTB, an architectural services firm with 23 offices across Australia, New Zealand and Asia, has completed several high-profile projects including the High Court of Australia, the National Gallery and the Sydney Entertainment Centre.
“The restructuring is in response to challenging business conditions and is designed to consolidate an unwieldy and complicated corporate structure,” the company said in a statement.
“The Australian business, which has grown to more than 30 companies over several decades, will be streamlined to four operating units structured along functional lines, namely, architecture, interiors, urban and landscape design and consulting.”
The business was contacted this morning, but no reply was available prior to publication. Administrator FTI Consulting was also contacted, but declined to comment and referred to the company’s own statement.
The restructure will see all current offices remain open, although 8% of the current workforce will be affected. Full redundancy benefits will be offered to staff affected by the changes.
“The domestic restructure will involve the appointment of voluntary administrators to some companies within the group however the main business and brand will continue to operate as normal,” it said.
Chief executive Kevin Fitzgerald said the restructure was necessary to help the company survive, pointing to poor conditions since the beginning of the global financial crisis in 2008.
“The federal government’s stimulus package for the industry through the schools program was successful in insulating the building and design sector from the worst effects of the GFC. But as that initiative washed though some time ago the underlying domestic demand has been weak for an extended period. The business needs to change.”
“I am confident this restructuring will secure the future for the company and allow us to continue delivering high quality services to clients,” he said.
The company offers several architecture and building services, including interior design, landscape design, planning and consultancy work.
HBO+EMTB was founded in 1994 in New Zealand and eventually expanded into Australia. The business focuses on a modern design, which enabled it to win major projects such as the High Court and Sydney Entertainment Centre buildings.
HBO+EMTB also services design in commercial and residential real estate. Property experts note these areas have been under significant pressure.
“We have a situation now where the industry is going sideways,” Housing Industry Association economist Harley Dale told SmartCompany this morning.
“I don’t find it surprising some business elements are feeling pressure.”
With regard to commercial construction, Dale says he’s hearing similar tales.
“I’m hearing it’s very patchy, and signs of a broad-based recovery aren’t really there unless they’re tapped into resources-related money or investment. Commercial has had a difficult year.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
