Taylor Wimpey announces 1,000 more job losses

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The Independent Online

Housebuilder Taylor Wimpey confirmed today it has axed a further 1,000 jobs as it said property sales slumped by 27 per cent since the beginning of July.





The recent raft of job losses brings its total jobs cull to nearly 1,900 in the UK this year.



And Taylor Wimpey offered little hope of better times as it warned there was no immediate end in sight for the property downturn.



Today's grim update came as figures suggested that the number of home sales in the UK had fallen to at least a 30-year low, according to the latest survey from the Royal Institution of Chartered Surveyors.



Taylor Wimpey reported net reservations of 165 on average a week since 1 July, despite slashing prices to maintain sales.



Britain's biggest housebuilder said its order book stood at 6,607 homes - 40 per cent less than at this time last year.



Taylor Wimpey also cautioned of a potential further hit to the value of its land and building stock on top of its hefty writedowns announced at the half-year stage.



Taylor's build rate has slowed to around 40 per cent of normal levels as it has adapted to the new property market conditions.



It said it now hoped to keep prices steady for the next few weeks after meeting internal sales targets through price cuts so far this year.



But it added: "We remain of the view that there will not be a recovery in the UK housing market in the short-term.



"We welcome the significant interest rate reduction announced last week and are hopeful that if this is passed on to consumers, then it will help the market to return to stability more quickly."



Taylor Wimpey has suffered amid the housing market troubles, revealing in August that it racked up £1.54bn in losses for the first six months of the year.



It dived deep into the red after writing off £586m from its UK land portfolio and more than £816m linked to goodwill recognised from the £5bn merger between Taylor Woodrow and George Wimpey last year.



The group said today it continued to focus on "cash management and cost reduction".



Taylor Wimpey also confirmed that negotiations with its banks to secure new borrowing arrangements were ongoing, but added it was keeping "other strategic options" under review to reduce debt.



The firm was last week reportedly in negotiations with private equity firm TDR Capital about a cash injection, while analysts have speculated that Taylor Wimpey may need to launch a wider fundraising bid to trim its debt.



Taylor Wimpey - which has an estimated debt mountain of £1.9bn - expects the talks with banks to conclude early next year.



The group's outlook for the north America and Canadian housing market - where Taylor has 220 sales outlets - is also gloomy, with sales declining further after the recent events of the global financial crisis.



Taylor Wimpey shares fell 8 per cent as market attentions turned to the group's challenges in securing new debt deals with banks.



Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the situation remained "bleak" for Taylor Wimpey, with mounting debt and deteriorating property markets.



"If further evidence were needed, today's update from Taylor Wimpey confirms the dire state of the UK and North American housing markets," he added.

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