Barratt joins job cut roll call

Source: Construction Digital

Date :10/07/2008 16:20:36

The torrid week for the housebuilding industry has continued with the news that Barratt Developments has axed 1,200 staff and scrapped its plans for a final dividend.

The Newcastle-based housebuilder announced that it will close two divisions and merge another eight in addition to the cutbacks.

The company however tried to remain upbeat.

“By enhancing our sales capability, reducing our costs, and agreeing a new financial package, we have now substantially improved our competitive position and are better placed to deal with what will be a very challenging period ahead,” said Mark Clare, Barratt’s chief executive.

Downturn

The worst slump to hit the housing market for 15 years has now seen over 4,000 jobs lost over the past week as Taylor Wimpey, Persimmon, Bovis Homes, Redrow Plc and now Barratt have desperately sought to cut costs.

The global credit crunch is close to crippling the construction industry as mortgage lenders become more and more unwilling to grant credit.

The Bank of England’s decision to hold interest rates at five percent today is unlikely to bring any immediate hope to the industry. The problem of rising inflation is effectively tying the Bank’s hands, and analysts say it could be quite a while before they come down.