Kāinga Ora faces financial scrutiny, cuts 330 positions
Kāinga Ora, New Zealand's social housing agency, is set to implement significant job cuts as part of a second round of restructuring aimed at improving efficiency and meeting the government’s housing delivery expectations. The agency announced it would cut 321 roles, adding to previously announced reductions of 232 positions across various teams, totalling nearly 600 jobs.
The proposed job cuts will impact multiple departments within the organisation, including urban planning and design, commercial and construction teams, innovation, and the investment management office. Notably, the restructuring plans also suggest a drastic reduction in the staffing levels of the Te Kurutao Group Māori team, which was established to address Māori housing needs and fulfill Treaty of Waitangi obligations.
Kāinga Ora’s Chief Executive, Matt Crockett, emphasised that the agency is transitioning from a period of rapid growth and extensive building programs to a more stable phase focused on the steady development of social housing. “Kāinga Ora has scaled up over the last five years to deliver a successful and extensive build programme,” he stated. “We are now moving into a different phase where our focus is on creating a steadier state of social housing builds, alongside work to upgrade and replace thousands of homes in our portfolio.”
Staff at Kāinga Ora received briefings from management on the proposed cuts on Wednesday, with the atmosphere described as "terrible" by an unnamed employee, according to the New Zealand Herald. Employees expressed concerns about the potential impacts of the layoffs, with Crockett acknowledging the unsettling nature of the proposed changes. He assured staff that the agency is committed to supporting them throughout the process and will carefully consider all feedback.
As of July 1, 2024, Kāinga Ora employed 3,438 staff members, and the upcoming cuts have raised significant concerns about morale and job security within the agency. The restructuring follows a critical review chaired by Sir Bill English, which concluded that Kāinga Ora was underperforming and financially unsustainable. As part of the government’s response, five of the seven board members are expected to be replaced.
Prime Minister Christopher Luxon has called for greater clarity in the agency’s strategy and enhanced financial management. In line with this directive, Housing Minister Chris Bishop outlined a letter of expectations for the Kāinga Ora board, emphasizing financial sustainability as the top priority. Bishop has previously labeled Kāinga Ora as “underperforming and not financially viable,” urging the agency to enhance its transparency and accountability.
Additionally, it was noted that Andrew McKenzie, the former Chief Executive of Kāinga Ora, resigned in July and is set to receive a compensation payout of approximately $365,000 for notice and redundancy. McKenzie’s departure comes at a crucial time for the agency as it navigates through significant changes and restructuring efforts.
As the agency enters a period of consultation regarding the proposed cuts, decisions will be finalized by mid-November. The future of Kāinga Ora remains uncertain as it grapples with the challenges of delivering effective social housing solutions while ensuring the agency's financial viability.