BA set to slash purchasing function

6 January 2000
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06 January 2000 | Elizabeth Bellamy

A corporate shake-up at British Airways has extended to the troubled airline's purchasing department, with claims that 20 per cent of jobs will be lost as part of a restructuring programme.

According to Bill Sloan, a former senior manager for aircraft contracts at BA, the company plans to cut one-fifth of its procurement staff. Several senior purchasing staff at the airline were "looking about" for other employment, while a number had already taken early retirement packages, added Sloan, who is now director of purchasing at investment bank Merrill Lynch.

In November, the airline announced 1,000 job losses - to be achieved by voluntary redundancies - after it suffered a 43 per cent slump in interim profits to £240 million. Unions are currently negotiating with BA over a further round of job cuts, thought to be up to 8,000.

The company has also unveiled a £225 million cost-cutting scheme for the next financial year, which will run alongside a £1 billion long-term savings plan that was started in 1996.

The job cuts claim comes after BA's purchasing and operations contract divisions were merged in October. A BA purchasing source told SM that the merger, designed to consolidate the airline's billion-pound external spend into one area, was "the right thing to do". The new procurement team would be smaller and "staff efficiencies" were being made.

While a BA spokeswoman would not confirm the extent of procurement cuts, "we will be looking at our departments' use of manpower," she said.

Following October's divisional merger, former head of operations contracts Silla Maizey has been made general manager of operations contracts and purchasing, while former director of purchasing Bob Dick has taken up the post of BA head of air trading. Like Dick, Maizey will report to Colin Matthews, director of technical operations.

The two divisions "married up well", the BA spokeswoman said, and the move to combine purchasing and operations contracts would "work more efficiently" and create savings. Purchasing was previously responsible for buying goods and services, including catering, vehicles, furniture and marketing services, while operations contracts' spend included fuel purchase, air-traffic controlling fees and crew hotel accommodation.

However, Sloan claimed that the move would "dilute purchasing's responsibility" and result in a loss of training opportunities for staff.

"In the late 1980s and early 1990s, BA was the place to be if you wanted to be a purchasing professional, as it was a good training ground," he said. "It's a shame. I don't think that will be the case anymore."


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