Hundreds of job losses have been announced across the West Midlands as the effects of the credit crunch and the decline in the housing sector worsen.
The deepening housebuilding crisis claimed a major victim in established Midland developer Chase Norton Construction, which announced it was going into administration with the loss of 107 jobs.
Elsewhere, more than 200 jobs in Birmingham are at risk after insurer Zurich announced it was carrying out a restructuring operation. The firm said 223 people were at risk of redundancy although it was hoped to minimise the losses to between 70-90 workers.
The remaining 331 workers in the city, based in offices in Hagley Road and Rubery, are unaffected and the company said it was committed to retaining a presence in Birmingham.
Across the UK, the jobs of 1,300 Zurich workers - almost a quarter of its 5,300 employees - could be lost although the firm said it was hoping to keep this to 870.
Meanwhile, troubled housebuilder Barratt Developments (BDEV) announced it was axing 50 jobs from its office in the West Midlands.
The company said it had begun a 30-day consultation with workers at the Halesowen site as part of a restructuring of the business which has put about 1,000 of its 6,700 jobs at risk. The Halesowen office will not close, the company confirmed.
The announcement came 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.
The collapse of Chase Norton is a major blow to the region’s confidence. The long-established builder is run by Rod Ackrill, who is the current president of Birmingham Chamber of Commerce and Industry.
It had a turnover of about £40 million and has been involved in some of Birmingham’s major redevelopment projects, including the £15 million mixed-use scheme in Commercial Street, designed to revitalise the dilapidated industrial area south of the Mailbox.
Administrator PricewaterhouseCoopers was appointed yesterday after the company’s operations stagnated because of a lack of funding.
In a statement, PwC said: “Chase Norton Construction was placed into administration after it found itself in a position where it did not have access to the working capital required to fully complete the contracts in progress, a situation that had arisen as a result of the wider group banking arrangements.”
Joint administrator Mark Hopkins said 107 workers from the company’s head office in Meriden had been made redundant and 16 had been retained to assess the future of the company’s outstanding contracts.
All work on the company’s projects has been suspended until the fate of the business is resolved. Chase Norton Construction is one of the four divisions comprising the Chase Midland group. Mr Hopkins said he had been appointed as administrator solely for Chase Norton.
In a further blow to the region, paving stone maker Marshalls said it could axe 140 staff as it brought forward cost-cutting plans in a bid to offset what it termed an “increasingly uncertain” market.
The decision is likely to see the Huddersfield-based company close its concrete manufacturing bases at Cannock and Sawley in Nottinghamshire.
There were also fears more jobs could be lost after soft furnishings group ScS went into administration, although a private equity rescue deal was agreed that saved the jobs of 1,300 workers together with the group’s 96-branch network. That includes two outlets in Birmingham plus ones in Cannock, Coventry, Kidderminster, Solihull, Stafford, Stoke-on-Trent, Telford, Wednesbury and Wolverhampton.
However, shareholders were told it was unlikely they would receive a payout for their shares.
The new owner is an affiliate of US-based buyout firm Sun Capital Partners, called Parlour Product Holding. Administrators confirmed the deal meant it would be “business as usual for employees, customers and suppliers”.
ScS has been hit by consumers reining in spending on ‘big ticket’ items since last summer’s credit crunch, with plummeting sales leaving the group in need of extra funding.
There was better news however as supermarket operator Asda said it was to create 400 jobs by opening a new store in the Black Country. The outlet, which is due to open its doors in November, will be a key feature of the £30 million revamp of Halesowen town centre.
A spokesman for Asda said the company will be starting a recruitment drive at the end of this month.