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Colas to cut 2,400 jobs after Central Europe slump

Bouygues is set to cut the European workforce at its road and rail specialist subsidiary Colas by 2,400 in the wake of a 20 per cent fall in operating profit for the first half of 2010.

According to the Financial Times, the French giant will reduce Colas’s headcount in Central Europe from 7,900 to 5,500 as a result of public spending cuts in Hungary, Slovakia, the Czech Republic, Romania and Croatia.

Operating profit at Colas’s central European divisions fell 20 per cent, causing it to make a net loss of €29m. Overall, Colas posted turnover of €5bn in the first six months of 2010 - down 2 per cent compare to the same period in 2009.

Chief executive Martin Bouygues said that a “very deep, very brutal recession” in the region had halved turnover in some countries.

Mr Bouygues added that he expected government spending cuts to have a lesser effect on the company’s road construction divisions in western Europe because they are more focussed on maintenance work.