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Fortescue Future Industries ‘family’ slashed after rapid green jobs growthNICK EVANS

Fortescue chairman Andrew Forrest. Picture: AAP

• 7:21PM FEBRUARY 9, 2023
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Only 15 months ago, Andrew Forrest’s Fortescue Future Industries was putting recruiting ads in the lifts of the Perth towers that house BHP, Rio Tinto and South32.

This week, any of the “tenacious go-getters” that heeded Fortescue’s call to jump ship to the new green hydrogen economy face the possibility they will now lose those jobs as Fortescue looks to slash its workforce to save cash.

Workers in the mining industry are no strangers to mass redundancy events. If commodity prices fall, companies cut costs and shed workers. But that is not what is happening here. While the iron ore price briefly dipped below $US90 a tonne last year, this week it was back above $US120 – still extraordinarily high by long-term standards.

And yes, the skills shortage over the past two years in WA has forced up wages amid a bidding war for skilled workers and even graduates. But Fortescue’s records show it had 1500 more direct employees at the end of June 2022 than it did 12 months before. In that same period, the workforce at its FFI green arm grew by more than 800.

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When Fortescue did its last mass round of redundancies in 2015, sacking as many as 700 workers, it was triggered by a tumbling iron ore price, troubling levels of debt, and a major change to on-site rostering arrangements. Forrest was Fortescue’s non-executive chairman at the time and chief executive Nev Power oversaw the cull. Days after it began, Forrest described the cuts as “personally tragic” and ”heartbreaking”.

If there’s any heartbreak this time, it is of Forrest’s own making. He drove the rapid growth of FFI staffing, as the company tried to nail down every possible undeveloped green energy project it could. And, as executive chairman, it is under his watch – and presumably direction – that the latest plan for cost-cutting and redundancies has been developed.

READ MORE: Hundreds of job cuts planned at Fortescue | Five green energy projects this year: Fortescue |Aitken family fund braces for fallout from split

To be fair, now is probably a natural point for a review of FFI’s staffing levels. FFI chief executive Mark Hutchinson has been in the role since July and has said the company is narrowing its focus to make a final investment decision on five projects this year.

There is also the growing pressure on Fortescue over its spending levels on FFI – which aside from an endless parade of memorandum of understandings and other early stage agreements – is yet to produce much of anything that can be valued by the market.

With the extraordinary leadership exodus over the past two years, it would hardly be surprising if the company’s back end has put on some excess weight as well.

The market will likely welcome any move to cut costs at Fortescue, and particularly at FFI, in the hope it signals a return to spending discipline. But for the workers likely to be made redundant, Forrest’s incessant use of the phrase “Fortescue family” to describe its workforce is likely to ring a trifle hollow this month.