Katerra CEO's salary cut to $0 amid layoffs, operation shutdowns | Dump Trucks Charlotte NC
Columbus Ohio Dump Truck Company Brief:
- "As parts of our business shut down [due to the effects of the COVID-19 pandemic] we unfortunately need to make some reductions in personnel through layoffs and furloughs," Katerra CEO Michael Marks told Construction Dive in a written statement on April 2.
- "These actions have been taken today." The firm's layoffs represent 3% of its global workforce, Marks said, and though he did not disclose its most recent workforce figures, a statement in December that the firm had grown to 8,000 would indicate the reduction impacts approximately 240 employees. The columbus oh dump truck company did not name any particular projects, divisions or locations affected but a representative said that stay-at-home orders throughout the country have forced some of its operations to shut down.
- "In addition, we are making salary cuts for the higher-paid employees in the company, increasing the reductions as salaries increase," he added. "In my case, I am reducing my salary to zero, and those funds will be contributed to a financial assistance fund for employees who have particular financial hardships as a result of the virus."
- SoftBank, one of the startup's most prominent venture capital backers, announced early last week that it was going to put up around $41 billion of assets for sale to reduce debt as the coronavirus crisis affects the market and this week said it's not going to buy back $3 billion of stock in another of its ventures, WeWork. A representative for SoftBank did not provide comments about whether these moves affect its investment in Katerra by the time of press. The Menlo Park, California-based Katerra had been funded in part by an $865 million fund from SoftBank's Vision Fund in January 2018.
Dump Trucks Columbus OH Insight:
Katerra is not the only firm that has announced executive salary reductions in the past week. Skanska, Balfour Beatty and Jacobs Engineering, for instance, all announced that they would freeze or cut executive pay earlier this week.
AECOM announced today that it will reduce the salaries of its "board of directors, executive leadership team and other senior leaders" by 20%, effectively immediately.
Layoffs have hit the construction industry throughout the country this week as well. In news today, Bloomfield, Missouri-based Robinson Construction has reportedly laid off 80 workers and the state of Pennsylvania has seen layoffs as well, according to a local newspaper.
Katerra, founded in 2015 and focused on software- and other tech-driven prefabricated building components sales and offsite-centric general contracting, also announced layoffs several months ago. In December, Katerra said it would close its 250,000-square-foot modular building "component and finish" factory in Phoenix and lay off 200 workers by the end of the year.
It also announced at that time that co-founder Fritz Wolff had stepped down from the board to concentrate on other professional pursuits. Several months before that, the firm had hired a round of executives including a new chief financial officer, director of the board and head of affordable housing.
In 2018, Katerra's mergers and acquisitions activity, which included the absorption of at least six businesses over the course of the year, including several architecture firms and an India-based "manufacturing technology specialist, KEF Infra, earned it Construction Dive's "Dealmaker of the Year."