Jobs cuts in construction sector continue

Jul 3 2008 by Graeme King, The Journal

HUNDREDS of job losses are hitting the housebuilding sector in the North East, a union leader said last night, in the wake of the country’s biggest housebuilder Taylor Wimpey announcing new problems.

UCATT union leader John Scott said his office had been “inundated” with enquiries from members worried about their companies seeking redundancies.

Taylor Wimpey said yesterday it was experiencing a “significant downturn” in its business, was increasing its job loss target from 600 to 900, and was making new efforts to shore up its finances.

The company’s North East offices in Sunderland and Stockton have escaped Taylor Wimpey’s closure programme which will axe 13 of 39 offices nationwide – but redundancies are being sought right across the UK.

The news from the largest firm in the sector follows job losses announced by most of the big housebuilders in recent weeks.

Statements from Haslam Homes, Gladedale Homes, McInerney Homes and Persimmon Homes recently have warned they have been looking at substantial redundancies.

Earlier this year Bellway revealed it was seeking 66 job losses, and Taylor Wimpey – long before its wider problems were revealed – said it was shedding 35 staff.

Yesterday, shares in Taylor Wimpey nearly halved in value after a grim update to the City. The company has yet to agree a funding package worth a reported £500m, and faces breaching “one or more” of its banking covenants next year if the market continued to weaken.

Housing completions were down 33% during the first six months of this year, it added, with reservations down 45%.

The firm said: “We expect that the UK housing market will remain weak at least through 2008 and we do not anticipate any recovery in the short-term.”

It said it remained “in full compliance” with its banking covenants, but warned that without an amendment “in certain negative market scenarios we might breach one or more banking covenants at the first testing date in 2009”.

Mr Scott said: “The Taylor-Wimpeys and Persimmons of this world would rather get on with their redundancies without our involvement, but they are not going to get away with it. The housebuilders are in a desperate situation at the moment. We are inundated with enquiries.

“We are dealing with hundreds of job losses in the region. If there has not been mention of redundancies, there is pressure on rates of pay.”

Barry Oliver, regional director of the Federation of Master Builders, which represents small construction firms, said: “Our members are not as buoyant as they were last year or the year before, but by and large the small building sector has not been hit as badly as the large housebuilders .”

A spokesman for Taylor Wimpey said “We are going through the proper consultation period at the moment.”

David Jenkinson, regional chairman of Persimmon Homes, said: “Persimmon Homes has been working hard to provide all the support required during this difficult time for everyone involved and has followed all the necessary redundancy procedures.”

Page two: Teesside housebuilding crisis worsens