Engineering firms quietly scale back workforce

Staff reporters

Electrical and mechanical engineering firms have begun laying off employees discreetly as a drastic reduction in the number of private construction projects in recent years has led to a contraction in infrastructure work, it has been learned.

According to The Standard's sister newspaper Sing Tao Daily, it is understood that WSP - an international engineering consultancy firm based in the United States with over 1,000 staff - has notified its department heads since last month to be prepared for staff reduction.

It was learned that the company would dismiss 50 people in an initial phase and about 100 in a subsequent phase, mainly involving staff at the rank of assistant engineer with relatively low seniority, although some senior staff have also been dismissed.

As most mid-level staff will be maintained, it is expected that the redundancy measure will not affect existing projects.

ARUP - another leading engineering consultancy firm, headquartered in the United Kingdom - is also "quietly firing people."

In addition, some small and medium-sized companies have also been alleviating financial pressures by reducing salaries or not paying out bonuses.

"Some of them have even asked employees to reduce the number of working days per week, which is also a de facto pay cut," a source said.

"Accordingly, in the absence of projects, it is natural for them to immediately reduce manpower to maintain operations."

Sources also said cash flow is crucial for engineering consultants as they operate on a "do-now, pay-later" basis.

"Usually, they have lines of credit from banks. And multinational companies can be supported by their parent companies," a source said.

"It seems WSP is forced to dismiss a large number of employees, otherwise it cannot survive."

While many of the dismissed employees are less senior, the large-scale manpower reduction may also cause a profound impact on the industry's talent pool, sources said.

In the current system, engineering students are required to be trained for two years and work in a company as an assistant engineer for four years to become a member of the Hong Kong Institute of Engineers. Another year is required before they can apply as a registered engineer and obtain a qualification for issuing engineering projects.

"But firing all the assistant engineers who have been working for two or three years who are not licensed may cause them to [leave the] industry, leading to shortage of new blood," a source said.

In addition, it is understood that international engineering consultancy firms with multinational businesses have "made Hong Kong's number of [employees] more [manageable]" by deploying Hong Kong manpower to other business points, such as the United Kingdom and Singapore.

As some local engineers have long had the idea of emigrating, this also has contributed to a manpower shortage.

"These kinds of deployment strategies make it more difficult to observe how much talent Hong Kong has lost," a source said.

Sources urged the Development Bureau to launch supportive measures to maintain a sufficient cash flow in the industry, adding that there were cases of main contractors of "design plus construction" companies owing wages.