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Business News

Building supplies firm Wolseley to shed 2,000 jobs

Plumbing and building supplies firm Wolseley today announced plans to cut 2,000 jobs and close more than 200 branches in the UK and Ireland.

The Reading-based firm, which trades as Plumb Center and Build Center, said the moves reflected its expectations for a further decline in trading. The company also shed 5,050 positions between August and the end of October, mainly in North America.

Wolseley, which operates more than 1,900 branches in the UK and Ireland, said the latest job cuts would be phased over the next few months.

Wolseley's headcount reduction is one of the biggest in recent days, after a raft of UK companies including BT, JCB, truckmaker Leyland, Virgin Media, Yell and GlaxoSmithKline all announced plans to shed labour.

Many more job losses are predicted, with increasingly dire predictions about the jobless total. Business groups are constantly revising their expectations up, with some now believing unemployment will go over three million.

The job cuts at Wolseley's UK and Ireland division are expected to reduce annual costs at the company by £80 million.

The pressure on Wolseley to reduce overheads was highlighted by first quarter figures today, with group trading profits down 30 per cent due to lower profitability at its UK and American operations.

The company said: "Our objective remains to ensure the appropriate sizing of the cost base in line with the expected market environment."

Wolseley said revenues in the UK and Ireland division decreased by about 10 per cent with trading profits down by around 65 per cent in the three months to 31 October.

The company said its building materials brands such as Build Center and Brooks in Ireland continued to be affected by the rapid deterioration in new residential construction.

The company's consumer-focused business Bathstore also reported a significant deterioration in revenues in the first quarter.

However, Wolseley said Plumb Center continued to show resilience, with more than two-thirds of revenues coming from the residential repair and maintenance market.