Troubled housebuilder Barratt Developments (BDEV) has announced it is to axe 50 jobs from its office in the West Midlands as the crisis in the housing sector deepens.
The company said it had begun a 30-day consultation with workers at the Halesowen site as part of a restructuring of the business. It is thought around 1,000 jobs are at risk across the UK – close on 15 per cent of the group’s total workforce of 6,700.
The announcement comes 24 hours after rival builder Taylor Wimpey announced it would be axing 900 workers and closing a third of its UK regional offices – one of which is thought to be in Wolverhampton.
Barratt’s spokesman Dan Bridgett said: “We are making reductions across the country on a division by division basis.
“The West Midland office is not one of those being closed or merged, however, we will be reviewing costs and a reduction in headcount is expected to result in the loss of around 50 jobs.”
The restructuring will see the company reduce its UK divisions from 32 to 26; offices in Chester and Sheffield are being closed and eight others will be merged to create four new divisions.
Mr Bridgett said the move was being made as part of prudent financial management in the face of difficult trading conditions.
The struggling housebuilder has been the worst affected by the decline in the housing sector.
On Tuesday reports said the group had been able to strike a deal with its lenders to strengthen finances badly hit by the housing market downturn.
The company’s bankers - led by HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB - were said to have given initial approval for a refinancing deal.
Barratt is burdened by £1.7 billion in debt which it used to buy rival Wilson Bowden last year at the top of the market.
But its shares have been hammered in recent months amid worries over its balance sheet and the prospects for the group as the housing market stalls.
Shares were dragged down almost 30 per cent on Wednesday by the poor trading update from Taylor Wimpey, which failed in its attempts to get the £500 million refinancing package it was hoping for.
The deal with the banks, reportedly negotiated by NM Rothschild and Deloitte, is likely to see Barratt’s banking covenants on debt relaxed and also provide an extra £400 million in bank debt to pay off a £600 million short-term facility used in the Wilson Bowden deal.
It is thought that the firm could confirm details of the refinancing in its next trading update, due on July 10.
The impact of the credit crunch has been felt across the housebuilding sector as the would-be buyers have been deterred by the difficulty of gaining affordable mortgages and weakening confidence over the state of the economy.