Plumbing and building suppliers Wolseley has announced that it is to cut 2,000 jobs nationwide, but was unable to confirm how badly the West Midlands would be hit.
The firm, which has its UK headquarters in Leamington Spa, confirmed that it would be closing 200 branches of its stores across the country and reducing its workforce in reaction to falling profits.
In the three months leading up to October 31, earnings dropped 45 per cent and net debt increased 8 per cent to £2.7 billion. The company blamed the strengthening of the dollar against the pound and euro, in addition to the global downturn in housing markets.
A spokesman for the company said: “At the moment we don’t have any specific details about how the Birmingham area will be hit.
“We have only just entered into the consultation period, but we will be making decisions regarding job cuts and branch closures over the next couple of months.
“Obviously uncertainty in the business is not good for anyone, so we will try and make decisions swiftly and begin phasing-in the redundancies. It would be safe to say that we will know more in the New Year.”
And the spokesman refused to rule out further job cuts in the coming months.
“It would be a foolish management company who would call the economy either way,” he said. “At the moment something that seemed completely impossible one day could be highly probably the next. It is certainly a difficult time for the industry, and we must react to that.”
Wolseley, which trades under the names Plumb Center, Build Center and Brandon Hire, among others, has been reassessing its position for the past year, after many years of impressive growth. The business has doubled in size every five to seven years over the last two decades, resulting in it becoming the world’s largest specialist trade distributor of plumbing and heating products, and a leading supplier of building materials.
The company was founded in Australia in 1887, and moved to Birmingham in 1889 where it grew to become a multi-faceted company with interests in the car industry, engineering and industrial supplies, before focusing on heating and plumbing.
The UK operation is managed from its Warwickshire base, while the business has grown to have 74,000 employees in 27 countries and annual sales of £16.5 billion.
However, since August 2007 the company has shed 15,000 jobs worldwide - and remains pessimistic about the prospects for the US commercial market in 2009.
The situation is especially gloomy in Ireland, where the company reported a downturn in housing starts of over 60 per cent compared to the previous year.
The company said that it would be taking action to “right size the group’s businesses over the remainder of this financial year.”
Chip Hornby, chief executive of Wolseley, said: “While these results reflect a further deterioration in the business environment in the first quarter, it was not unexpected, and we continue to react swiftly to market conditions with aggressive but measured cost reduction.
“In these unprecedented circumstances, the key priorities remain driving cost reduction and enhancing cash flow to ensure the group remains complaint with its banking covenants.”