HBOS and Wolseley signal further cuts

There was further gloomy news from the building and financial sectors yesterday as Wolseley signalled further cost cuts in the UK, and HBOS announced job reductions.

Wolseley, the building materials group, slashed some 6,000 jobs worldwide in the last financial year, and said it was keeping costs under review in the UK amid a deterioration in the market for new housing.

The company would not put a figure on future job cuts, but it said that 700 jobs had gone in the UK and Ireland in the past two years, including 150 in Ireland in the last quarter of the financial year.

The world's biggest distributor of plumbing and heating materials said trading profit fell by 28 per cent in the 11 months to the end of June as a rapid slowdown in UK business added to its woes in the US.

HBOS, which owns Halifax and Bank of Scotland, said it would cut up to 650 jobs in the next 18 months as it combines two operations serving small and medium-sized businesses.

The cuts at the bank, which employs about 70,000 people, are expected to be made through redeployment, voluntary redundancy and normal turnover.

Wolseley is the latest con-struction-related company to warn of dire trading, caused by a sharp slowdown in the US and UK housing markets as prices fall and banks rein in lending to deal with the credit crunch and the economic slowdown.

"The news just keeps getting more challenging," Chip Hornsby, the chief executive, said.

Wolseley has scrapped its final dividend to save around £150m.Its shares shed 18p to 272.2p. HBOS fell 5.5p to 254.5p.