Troubled Leicestershire housebuilder Barratt Developments today said it was merging its Barratt and David Wilson offices, costing 60 jobs.
The jobs are part of 1,000 posts going nationally as the firm struggles with a slowing housing market.Barratt East Midlands will be merged with David Wilson Homes North Midlands. It will result in a dual branding division run from David Wilson's North Midlands offices at Nottingham Business Park.
The Barratts East Midlands office at Chilwell, Nottingham, will close. Each office employs 200 staff.
A spokesman said in the region of 15% of the workforce will be made redundant. “We need to manage our overhead to manage market conditions,” he said.
“The conditions are unprecedentedly tough. We are making changes across the group and any changes will be carried out very carefully on an office by office and region by region basis.
“We are engaging in consultation with our staff. on the best outcome for all of them given the circumstances.
“Our number one priority is to ensure that Barratt’s core skills are retained at all costs.”
Barratt has been working on a refinancing deal with its banks after falling house sales and land values left it in financial difficulty. It took on substantial debt when it bought Wilson Bowden last year.
The firm is in consultation with employees over the cutbacks among the group’s 6,700 staff under an overhaul of the business which will also see regional offices in Chester and Sheffield closed.
The news comes a day after rival Taylor Wimpey announced plans to shed 900 staff and close 13 offices.
The job cuts will fall on building sites and in sales, administration and support as the firm shrinks the business to meet the tougher market conditions.
A Barratt spokesman said: "Our number one priority is to ensure that Barratt’s core skills are retained."
Barratt has been under pressure since the takeover of rival Wilson Bowden last year at the top of the market.
The firm’s share price has since slumped and it has been relegated from the FTSE 100 Index, but it is currently burdened with around £1.7 billion in debt from the acquisition.
The group is also set to merge eight of its offices into four under the reorganisation plans, which will leave it with 26 regional offices.
On top of the east Midlands changes, the Barratt and David Wilson Homes offices in Leeds and Southampton will be merged, while Aberdeen-based Barratt North Scotland will be combined with Barratt’s Edinburgh office.
The housing market has been hit as banks stricken by the credit crunch cut back on mortgage lending to would-be buyers.
The darkening outlook for the economy has also impacted sales in the crucial spring selling season, putting the finances of the UK’s biggest housebuilders under severe strain.
On Tuesday it was reported that Barratt was close to striking a deal with its lenders to relax banking covenants on debt and gain an extra £400 million to pay off a £600 million short-term loan used in the Wilson Bowden deal, although the company declined to comment.
Yesterday Taylor Wimpey said it had been unable to clinch a refinancing arrangement with its banks so far, and has also written off £550 million from the value of its UK landbanks and work in progress as the market falls.
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