BHP is cutting jobs and in-sourcing more of its contractor workforce to deliver ‘many billions’ in benefits for the business, according to chief executive officer Andrew Mackenzie.
The process has been ongoing globally for 12 months and will continue for another 12–18 months, according to a BHP spokesperson.
The mining major is seeking to simplify its business across back office functions such as finance, human resources, technology and external affairs.
“Each back office sub-function is working their processes, systems and timetable separately,” the spokesperson said. “External affairs made changes last year. Finance and technology are making some changes over the next few months.”
BHP did not provide comment on how many jobs would be lost in total.
Mackenzie told reporters and analysts at a 2018 financial year results briefing last year that the company aims to “remove duplication, bureaucracy and hierarchy” to reduce costs and cycle times.
“It is about teaching people at the frontline how to look almost move by move at how they can actually do their jobs more effectively,” he said.
“[It] is about in-sourcing more of our contractor workforce so they can be trained up, more constant and therefore more stable.”
The transformation program was established in late 2018 to take advantage of and “fully leverage” proven methods of continuous improvement, automation and BHP’s centres of excellence in order to make operations more safe, stable and predictable.
BHP expects to grow the value of the company “under almost all possible outcomes” in this changing world and return a higher proportion of excess free cash flow to shareholders, according to Mackenzie.
“Our focus is simple and resolute. To maximise cash flow, maintain capital discipline and increase value and returns,” he said during BMO Global Metals and Mining conference in February this year.
“At the heart of this transformation is our people. It will build on our capability, strengthen our culture and empower our frontline to act on their ideas, in real time, unfettered by bureaucracy.”
Mackenzie was confident the transformation program would shape BHP’s destiny and position it “for the next decade and beyond”.