Second building firm axes staff

8:37am Friday 11th July 2008

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FORTY jobs will be axed from the York office of Barratt Developments.

They are among the 1,200 jobs nationally which the housebuilder has announced it will shed to achieve £40 million in cost savings this year to protect itself from the downturn in the property market.

It is the second major blow in the city in a week from housebuilders. York-based Persimmon, reeling from the impact of the affect of the credit crunch on mortgages, axed 110 jobs in Yorkshire out of 1,200 across the country.

The jobs to go at Alpha Court, the Barratt York office in Monks Cross Drive, Huntington, will be “across the board – administration, office, site workers and sales,” said Dan Bridgett, head of the public limited company’s external affairs.

Mr Bridgett said: “It will affect in the region of 40 jobs, although I must stress that consultation is ongoing.”

He added none of the housing projects Barratt had begun in the region would be halted and it would only consider developing new sites “if local market conditions warrant it”.

Barratt plans to close two divisions and merge the remaining eight into four – the equivalent of narrowing down its number of offices from 44 to 26, although the York office will remain.

In its trading update to the Stock Exchange, Barratt stated the savings would be delivered on top of the more than £33 million it had saved by integrating construction company Wilson Bowden into its operations.

Mark Clare, Barratt’s group chief executive, conceded the UK housing market had severely dipped from early April and “significantly impacted” on the forward sales of the group. These totalled £0.7 billion, of which £539 million was contracted as of July 1, whereas last year at the same time the figure was £1.41 billion, of which £866 million was contracted.

The Barratt blow also comes as York property magnate, 49-year-old millionaire Kevin Linfoot, ordered work by his Leeds-based development company to cease on a landmark scheme to build Europe’s tallest residential tower block in the heart of Leeds.

Work by KW Linfoot on the £155 million Lumiere project, with 120 serviced apartments planned in two towers – one 55 storeys high, the other 33 storeys – will resume only when economic conditions improve.