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Wolseley cuts 6,000 jobs in one year

Building supplies group Wolseley said today it had cut 6,000 jobs in the space of a year as it battles deteriorating conditions in its key markets.

The group - which employs 75,000 people worldwide - warned cost reduction measures will continue in the UK, where it has seen a "rapid" downturn in conditions.

Trading profits in the UK and Ireland fell 17 per cent in the 11 months to June 30, including restructuring costs in Ireland of £9 million after headcount was reduced by 150 people and 13 branches were closed.

The Reading-based company, which earns around half of its annual £16 billion sales across the Atlantic, is best known for its Build Center and Plumb Center trading names.

Wolseley said overall trading profits were 28 per cent lower in the period, with group revenues up 1 per cent after benefiting from acquisitions.

It said trading conditions in most of its markets had deteriorated since its last update in mid-May, when it said UK profits fell by 6 per cent in the nine months to 30 April.

The US housing and Repairs, Maintenance and Improvement markets softened further whilst US commercial and industrial markets remained stable.

Wolseley added: "In Europe, there has been a rapid deterioration in market conditions in the UK, particularly with new housing, and many other European markets continue to soften. The group continues to focus on cost reduction and cash flow enhancement."

Chief executive Chip Hornsby added: "The deterioration in some of our key markets continues and it is likely that conditions will get tougher still.

He said the company would not pay a dividend to shareholders for the financial year to 31 July, saving the company £150 million.

Wolseley said it had cut 700 jobs in the UK and Ireland over the past two years - equivalent to around 5 per cent of the workforce.

It currently employs 14,000 people in the UK and 1,300 staff in Ireland.

Overall job cuts total 10,000 in the past two years - 12 per cent of the workforce - with the majority being in the United States.

Mr Hornsby added: "This is as challenging a period as we have seen, particularly as the downturn started two years ago in the US."