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Persimmon axes 1,100

Persimmon has joined rival top three house builders in making swingeing job cuts with the announcement that around 1,100 jobs will go at the York-based business.

In a trading update this morning, the company said it had been forced to take further restructuring steps on the back of the nosediving housing market.

It added: “We commenced this further restructuring of our business in May and it is almost complete. It will result in the loss of c. 1,100 salaried staff in total.”

Last week Taylor Wimpey said 900 jobs were going while Barratt is expected to axe 1,000 staff.

Persimmon said the restructuring would make a cash saving of around £45 million a year and annual savings on overheads of more than £20 million per annum.

It said the first six months of this year had been the most challenging in its recent history. In the six months to June 30, completions were down 31 per cent to 5,501 at an average selling price of around £181,500 – down on the £189,255 achieved last time. Operating margins were down to 14 per cent from the near 21 per cent last time.

Weekly visitor levels to its private housing sites have been down 20 per cent on 2007 while cancellation rates are up by a half to 26 per cent.

And the firm added: “We have taken action to reduce our build activity in the light of the lower rates on our sites. These efforts have led to a sharp reduction in the amount of new spend on our developments and we expect to achieve a significant reduction in the level of stock and work in progress over the next few months.”

Forward order sales stand at £650 million – 8 per cent ahead of levels at 1 January but 30 per cent lower than the figure recorded last July.

The only bright spot for Persimmon was the news that its social housing completions increased by 27 per cent on last time.

Persimmon will unveil its interim results on 21 August.