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Building supplies group Wolseley added to the growing list of companies to announce significant job losses today, unveiling plans for a further 2,300 redundancies, the vast majority of them in the UK. It has already axed 5,000 jobs from its global workforce of 74,000 this year.
In an interim trading statement, the company, which has 5,000 branches in over 70 countries, warned of "further deterioration in the trading environment particular in the UK and Nordic regions".
Revenue for the UK and Ireland fell by about 10% during the three months to the end of October compared with the same period last year, with trading profits down by around 65% over the same period.
A cost-cutting programme will lead to around 2,000 job losses in the UK and over 200 branch closures, it said.
Chief executive Chip Hornsby said the company would incur an exceptional restructuring charge of £45m after pushing through the latest round of job losses as parts of a wider cost-cutting programme which will save the company £103m a year.
It warned that "the markets in which it operates continue to deteriorate in the short term" and added that "action will continue to be taken to right size the group's businesses over the remainder of this financial year". That suggests further job cuts cannot be ruled out.
Hornsby said: "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 ... to ensure the group remains compliant with its banking covenants."
Group revenue was up 2% in the three months ended October 31 compared with the same period last year, but trading profit was down by around 30% compared with the same quarter in 2007. It would have been down further if the pound had not fallen so dramatically in recent weeks, the company said. The business has a big presence in North America and it said sterling's weakness boosted trading profits in the quarter by £23m.
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