House-builder to axe almost 300 jobs

Published on Monday 21 July 2008 22:13

THE Stewart Milne Group, one of Scotland's biggest construction companies, became the latest casualty of the house-building slump yesterday as it announced plans to make nearly 300 of its staff redundant.

The job losses amount to a fifth of the company's permanent UK workforce and almost half the job losses will be in the North-east.

Earlier this month, the deteriorating conditions in the housing market forced Edinburgh-based firm Cala Homes to cut about 30 jobs from its 400-strong workforce, and thousands of jobs have been lost in the construction sector by builders including Barratt Developments, Taylor Wimpey and the Kier Group.

Stewart Milne, the firm's chief executive, said: "No-one in our sector is immune from the downturn.

|The lack of liquidity and lower consumer confidence has resulted in a decline in sales and despite our efforts to overcome these challenges, the ongoing market conditions have impacted on us."

A spokesman for the company said: "As a result of the ongoing challenges affecting the house-building industry, the Stewart Milne Group have commenced consultations with employees regarding potential reductions in employee numbers across the UK, as they realign their business to meet the current market demands.

"The potential reduction in employee numbers is likely to be around 289, which represents about 20 per cent of employees. This comprises 120 jobs in the North-east of Scotland out of 993 employees and 73 jobs in the central belt from a total of 178.

In England, where market conditions have been more challenging, about 96 staff may be affected from a total of 260.

Final numbers will be defined during the consultation process.

"The construction division, which has a strong forward order book, is unaffected by the current market conditions."

Glenn Allison, the group's managing director, said: "We have worked hard to overcome the challenges and minimise the impact of market conditions.

"We deeply regret that redundancies may be required at this time.

"We will do everything we can to support those employees affected and all other employees in our business, while continuing to provide the highest quality standards of service to our customers."

He added that this included providing the affected employees with financial advice, counselling and practical support.

House-builders throughout Britain have been hit by a "mortgage famine" as banks have withdrawn products for potential buyers.

Recent figures from the Council of Mortgage Lenders Scotland showed there were 16,000 mortgages issued in the first quarter of 2008, compared to 20,000 in the first quarter of 2007.

The Stewart Milne Group, which began in 1975 with workforce of 30, is one of Britain's leading privately owned house-builders, with construction sites throughout Scotland and the north-west of England.

Last September, the company reported record profits for the 11th consecutive year, with pre-tax profits up 50 per cent to 42 million.

In the homes division, sales increased by 40 per cent to 250 million and the number of units sold rose to 1,200 from 1,000 the previous year.