Hire firm cuts 500 UK jobs in cost drive

Nov 27 2008 By the Evening Gazette

TOOL and equipment-hire firm Speedy Hire has cut 500 jobs UK-wide in the first phase of a major cost reduction drive.

The company, which has 10 sites in Tyne and Wear and 10 on Teesside, has closed 38 of its 500 branches across the UK and Ireland and cut 10% of its 5,000-strong workforce. The changes will save the company £24m a year, with a further £18m due from a second wave of cost cuts about to be launched. The moves will help offset difficult conditions, after October revenues came in 6% less than expected, despite infrastructure and utilities remaining healthy - the company has reported a 3.9% rise in half-year pre-tax profits to £23.8m and a rise in revenues of 22.3% to £256.2m.

The downturn has battered demand from customers in the general construction sector, although turnover from Speedy’s top 50 clients was up 36% over the period.

Speedy Hire was formed in 1977 and grew following the acquisition of Hewden Tools in August 2007.

Chairman David Wallis said October revenues were 6% short of expectations, but he added that the company remained on track, subject to no further deterioration in the market.

He added: “Given difficult economic conditions, we remain cautious in our outlook.”

A further 60 job losses have also been announced at Stockton manufacturer Caterpillar. The move comes after the company shed 75 temporary workers from its Building Construction Products (BCP) division in June.