KBR's new CEO cut 16 divisions toward 5 and sold its construction arms

KBR, the Houston engineering and construction firm and former Halliburton subsidiary, had built its business on US government logistics: the US embassy in Kabul, troop support after the Iraq invasion, the NATO base in Kosovo. When troops pulled out of Afghanistan, money got tight, and the company — then the eighth-largest commercial construction firm in the US — launched a strategic review to cut operating costs.

Stuart Bradie, CEO since June 2014, turned the review into a sweeping dismantling: 16 divisions cut toward five, reorganized around consulting and technology, engineering and construction, and government services, with EPC Power, EPC Infrastructure and other stand-alone construction segments shed. KBR sold its building division, exited power plant work, and put its construction division into a JV with Bernhard Capital Partners.

In November 2015 KBR sold its Infrastructure Americas unit — transportation, water/wastewater and aviation — to Stantec for $19 million, narrowing the company to hydrocarbons and international government services. The reorganization was costly — a pre-tax charge of $800 million to $1 billion — but KBR had cut $150 million of its $200 million annual savings target for end-2016 and posted positive Q3 earnings. 'We are pleased to continue the business transformation we set out to accomplish last year,' Bradie said, calling KBR more streamlined and cost effective.

$150M of a $200M annual cost-cut goal by late 2015 and positive Q3 2015 earnings; 16 divisions cut toward 5, with Infrastructure Americas sold for $19M.

The trigger was structural, not cyclical: the Afghanistan pullout removed the war logistics revenue the firm was built on.

The plan had hard numbers attached from day one — a $200 million annual savings target and a $19 million divestiture price.

Selling units one by one (building, power, construction JV, Infrastructure Americas) showed a deliberate sequence, not panic.

A new outside-arrival CEO could cut what insiders had built; Bradie framed each sale as 'another step' in one transformation.

Wound-down war revenue is a clock: sprawl bought in boom times has to be sold fast, in pieces, before the cash drain eats the core.

By November 2015, a year into the program, KBR had banked $150 million of its $200 million cost-cut goal for end-2016 and posted positive third-quarter earnings, which Construction Dive read as a sign the restructuring was working. The Stantec sale closed the infrastructure chapter; the stated end state was a five-division KBR centered on hydrocarbons and international government services.