The Swiss plumbing and heating products distributor Wolseley has cut more than 1,000 jobs in the UK and Europe due to uncertainty in the eurozone economies.
For the six months ended 31 January 2013, the company’s pre-tax profits declined by 20 per cent to £199m. Group sales fell 8.1 per cent to £6.28bn, while trading profits in the US division grew by 29 per cent year-over-year to £223m.
Wolseley, which is largely dependent on the strength of the commercial and residential property markets, was burdened with £3bn debt when the financial crisis hit in 2008. The company, however, reduced its debt to £871m by January 2013.
A further 220 staff are expected to be reduced in the UK as a result of Wolseley’s £30m acquisition of 22 sites from civil engineering supplier Burdens last autumn. Some 554 Burdens staff transferred over to Wolseley after the company went into administration.
In addition, Wolseley is in talks to sell a major part of its building materials business in France due to weak commercial and residential property markets. About 88 branches of Reseau Pro will be sold in the south of France, while another 24 will be closed. This move will further cut of 400 jobs.
Ian Meakins, CEO of Wolseley, said that the home improvements market was dependent on a rise in consumer confidence and there would be little short-term impact from measures aimed at kick-starting the housing market that were unveiled last week by the French and British governments.
Meakins added: “Anything that boosts the number of houses being built will help us at the edges. But what we really need is stability and consumer confidence. What we don’t want is lots of short-term stimulus that will see the market return to where it was once it runs out.”
The FTSE 100 company has already cut 990 jobs in Europe since August 2012.