Persimmon in mass job cull
Persimmon, Britain’s most profitable housebuilder, will announce tomorrow that it is cutting 20 per cent of its workforce, in the latest mass cull to hit the beleaguered sector.
Persimmon is expected to say it is making at least 1,000 redundancies in a trading update on Tuesday, as it attempts to reduce costs and ride out the credit crunch.
The news marks the latest round of bloodletting in the stricken construction industry, which saw Taylor Wimpey slash 900 jobs and Barratt make 1,000 redundancies last week.
Kier Residential is also axing 300 positions, putting the total number of job cuts in the housebuilding industry at 3,200 in the last week.
A source close to Persimmon said yesterday: “This is an industry thing and not specific to Persimmon. They are really trying to focus on the business, reduce costs, and tighten things up, to make sure they are in good shape for when the market improves.”
The firm, which employs around 5,000 people in Britain, is still in a consultation period with staff.
It is one of the biggest redundancy programmes seen in the industry yet. At the start of last month the Yorkbased company said it was axing several hundred staff but news the group will dispose of 20 per cent of its workforce will come as a shock to the City.
But Persimmon’s balance sheet is thought to be in better health than some its rivals. Last week Taylor Wimpey failed to secure £500m of funding from investors.
Meanwhile reports emerged yesterday that Britain’s housebuilders could see over £3bn shaved off the value of their land.
Data from broker Panmure Gordon claimed that if house prices fall by 17.5 per cent, the value of companies’ land assets could plummet by £3bn.
The combination of sliding property values and the paralysis of the mortgage market is hitting the construction industry hard.