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The firm's building business, now run by managing director Tony Lenehan, has been integrated into a new business services division, which will be headed up by Don Kenny, a former managing director of Johnson Controls.

A source at the group said the restructuring continued a process of gradual change instigated by McDonough since he took over the reins in 2001.

The source said: "It's more of a facilities management business these days. The firm still needs building for its cash generation but it is less central to the business."

The source added that the shake-up could result in the eventual disappearance of two brand names within the new business services division – facilities management business Citex and construction management arm Schal. The source said: "Those two names could disappear. The Carillion brand is taking over."

A Carillion spokesperson said he was not aware of any changes to the brands.

Former Citex chief executive Oliver Jones, who oversaw the firm's sale to Carillion, has been appointed business development director within the business services arm.

The firm still needs building work for cash generation but it is less central

Carillion source

McDonough has created three main divisions in the new business hierarchy, which became effective last week. The other two are health and transport, to be run by Adrian Bull and Paul Kirk respectively.

Below the three main arms will be a further four groups: international, private finance, developments and M&E arm Crown House.

In a memo to staff, McDonough explained that the restructuring would "complete our transformation to a sector and customer focused business". He added: "Our new structure will help us move towards our vision of being the leader in delivering integrated solutions for infrastructure, buildings and services."

Carillion last week predicted that 2003 pre-tax profit would be "not less" than the £50m achieved in 2002.