CMFEU questions why BHP cuts jobs to lower costs

The CFMEU said there are other ways BHP Billiton can save money rather than cutting thousands of jobs.

The comments come after a year which saw BHP embark on a wide-reaching productivity agenda which saw jobs slashed from coal, iron ore and nickel operations.

Yesterday the company announced its intention to cut $US2.6bn in cash costs as it targets productivity led gains of at least $US4 billion per year by the end of 2016-17.

Revealing the plans to investors in Sydney, BHP chief Andrew Mackenzie described the productivity gains as a “step-change”.

He said it means the company can produce more at lower costs.

For its coal business, BHP said it is targeting a 10% reduction in unit costs at Queensland coal in the 2015 financial year and a 15% decline in unit costs at New South Wales Energy coal by the end of the 2016 financial year.

CFMEU Queensland district senior vice president Mitch Hughes said cutting jobs was not a long term strategy that would work for the company, Daily Mercury reported.

"The mining game is has its booms and busts like anything like any other industry," Hughes said.

"Things are going to pick up in the coal industry and when they do BHP is going to need to ramp up again. There are other places they could save money.

"This is the conversation we've had with them many times, cutting costs on processes instead of staff. But we can't tell them how to run a business at the end of the day."

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