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07/07/2008
Housebuilder In Jobs Axe Talks
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Up to 1,000 jobs could be lost at housebuilder Barratt Developments as it struggles with the sluggish housing market.
The company, which employs 6,700 staff, has begun a consultation process with unions, with the cuts set to be completed within three months.
Barratt warned in May that "market conditions had deteriorated significantly" due to the reduction in mortgage availability.
However, in June, Barratt said: "The company remains comfortable with market consensus forcasts for completions numbers (18,300) and profit and tax and exceptional charges (£395m).
"The Group continues to operate within its £2.6bn of committed facilities and its banking covenants. Given anticipated completion numbers, net debt at the end of June is expected to be approximately £1.7bn in line with previous guidance."
The news comes just two days after rival Taylor Wimpey announced its own plans to cut 900 staff and close 13 offices.
Galliford Try, another construction group, is also axing 256 jobs in its housebuilding division.
In a further blow to the troubled property market, Ballymore, the residential and commercial developer has said that it is cutting 50 jobs, "which is more than 10% of its workforce" as part of a "management shake-up".
Barratt's share price has plummeted by 97% since its peak in February 2007 and the firm no longer features in the FTSE 100 Index of Britain's leading firms.
It is understood staff meetings have been called to discuss the impending job losses.
It is also thought that management wants to cut about 15% of the 6,700-strong work force with job losses expected in most areas.
A Barratt spokesman said that the "number one priority" was to "ensure that Barratt's core skills are retained".
Barratt has felt the pressure since the takeover of rival Wilson Bowden last year at the top of the market.
It is believed that the company is in debt of £1.7 billion from the acquisition.
Under the reorganisation plans, the company intends to merge eight of its offices into four, leaving it with 26 regional offices.
The Midlands and the west of England - the worst affected areas in the housing market crisis - are likely to be worst hit.
Barratt's Trading Update is scheduled for 10 July.
(DS)
The company, which employs 6,700 staff, has begun a consultation process with unions, with the cuts set to be completed within three months.
Barratt warned in May that "market conditions had deteriorated significantly" due to the reduction in mortgage availability.
However, in June, Barratt said: "The company remains comfortable with market consensus forcasts for completions numbers (18,300) and profit and tax and exceptional charges (£395m).
"The Group continues to operate within its £2.6bn of committed facilities and its banking covenants. Given anticipated completion numbers, net debt at the end of June is expected to be approximately £1.7bn in line with previous guidance."
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The news comes just two days after rival Taylor Wimpey announced its own plans to cut 900 staff and close 13 offices.
Galliford Try, another construction group, is also axing 256 jobs in its housebuilding division.
In a further blow to the troubled property market, Ballymore, the residential and commercial developer has said that it is cutting 50 jobs, "which is more than 10% of its workforce" as part of a "management shake-up".
Barratt's share price has plummeted by 97% since its peak in February 2007 and the firm no longer features in the FTSE 100 Index of Britain's leading firms.
It is understood staff meetings have been called to discuss the impending job losses.
It is also thought that management wants to cut about 15% of the 6,700-strong work force with job losses expected in most areas.
A Barratt spokesman said that the "number one priority" was to "ensure that Barratt's core skills are retained".
Barratt has felt the pressure since the takeover of rival Wilson Bowden last year at the top of the market.
It is believed that the company is in debt of £1.7 billion from the acquisition.
Under the reorganisation plans, the company intends to merge eight of its offices into four, leaving it with 26 regional offices.
The Midlands and the west of England - the worst affected areas in the housing market crisis - are likely to be worst hit.
Barratt's Trading Update is scheduled for 10 July.
(DS)
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