Barratt Developments is to axe 1,000 jobs, almost 15 per cent of its workforce, as the embattled builder attempts to slash its costs in the face of the housing crisis.
Barratt said it would close its offices in Sheffield and Chester and merge a further eight divisions into four, reducing its total number of divisions from 32 to 26. The company has begun a consultation period with staff on job losses and declined to say how many redundancies it was planning, but it is understood that Barratt's total headcount will be reduced from 6,700 to 5,700 once the cut-backs are complete.
Dan Bridgett, a spokesman for Barratt, said it had no choice but to let workers go. "We have to manage our overheads to reflect market conditions, and those conditions are very tough," he said.
Barratt shares have lost almost 97 per cent of their value over the past 18 months as house prices have tumbled and the availability of mortgage finance for buyers has been sharply reduced.
The company is currently attempting to refinance its balance sheet, which includes £1.7bn of debt, much of it dating from the purchase of the rival builder Wilson Bowden. It is due to update the market next Thursday on the progress of its negotiations with creditors.
The job losses, which will be spread across building sites, sales and administration, are the latest blow to the housing sector, where more than 2,000 redundancies have now been announced in the past 48 hours alone.
Galliford Try, the construction group with interests in public sector housing, also unveiled job losses yesterday, with more than 250 posts to go. It followed Taylor Woodrow, which on Wednesday said it would make 1,000 workers redundant.
Shares in Barratt closed 1.25p higher yesterday at 41.5p. At the company's peak last February, the stock was changing hands at almost £13 a share.Reuse content