More Job Cuts In Construction

Another 2,300 job cuts were announced by Wolseley. These cuts from the ailing building material supplier will mean that 20,000 jobs were lost in this week alone. This announcement is right on the heels of the 10,000 job cuts planned by BT. Wolseley had already planned 5,000 cuts from their North American branches which are suffering from the drastic drops in the housing market. These cuts will primarily hit Britain though, with only 300 of the planned cuts hitting foreign branches. Another 200 branches will also be closed as part of the new wave of cuts.

Citigroup, formerly the biggest bank in America, also announced yesterday that another 52,000 cuts will be made. 2,000 of those positions will come from London alone. With this news, the CBI has announced that unemployment will likely hit 3 million at some point next year.

Wolseley has already cut 14,300 jobs since August last year. This announcement drove share prices down another 10% to close at 245p. Wolseley defends the decision as a necessary step to protect their company from the continued fall of the construction market. The move is expected to save them £103 million a year. This is also a necessary step to guarantee that the company doesn't violate the lending rules already established. Their net debt is up by 8% since the end of July to a shocking £2.7 billion.

The rise is largely attributed to changes in the exchange rates. A statement from Wolseley warns that they only expect economic conditions to get worse, but that the size of the fall shouldn't be more than they can handle. Their pre-tax profit is down 45% compared against the 3 month period before the end of October last year.

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