Taylor Wimpey axes 900 and shares plummet
- Published: 02 July 2008 10:49
- Author: Jessica Rowson
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- Last Updated: 02 July 2008 10:59
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Shares in housebuilder Taylor Wimpey halved today amid reports of the exit of its finance director, Peter Johnson and the announcement of approximately 900 job cuts.
The housebuilder had been expected to unveil a capital injection from shareholders and other investors to help see it through the credit crunch and the housing market downturn.
However, it announced yesterday that it has failed to raise the extra capital it said it needed, citing tough market conditions.
It announced that it will close 13 of its 39 regional offices and reduce staffing levels across the business, with the anticipated loss of approximately 900 jobs, resulting in a estimated reduction in overhead costs of approximately £45M.
Over the last few months Taylor Wimpey have taken additional actions to guard against the credit crunch including tightly controlling expenditure on work-in-progress, not making new commitments for land purchases, renegotiating terms with subcontractors, and reducing the price of homes with the aim of achieving a steadier sales rate and improving cashflow.
Housing markets are experiencing a significant downturn, characterised by significantly lower weekly sales rates and lower average selling prices than in recent years.
