Page last updated at 15:49 GMT, Tuesday, 8 July 2008 16:49 UK

Persimmon makes 2,000 UK job cuts

Housing development built by Persimmon

UK housebuilder Persimmon says it has shed about 2,000 jobs since the start of the year, including 1,100 office jobs and 900 site-based jobs.

Persimmon blamed the downturn in the housing market on low confidence as customers struggle to get mortgages.

Completions of house sales in the first six months of the year were down by 31% it said, during the "most challenging period in our recent history".

Separately, Savills said central London prices have fallen 7.5% this year.

The estate agent added that the volume of transactions in the English capital was down by 45%.

Only the "very top end" of the market, where property values exceed 5m, was proving "relatively immune" to the downturn, Savills said.

The news sent Savills shares 10% lower on Tuesday trading.

Meanwhile, Persimmon, which has seen its shares sink in line with other housebuilders, lost a further 0.5% having slipped 6% in early trading.

Last month, the decline in Persimmon's share price meant that it was demoted from the FTSE 100, the share index that contains the largest UK-listed companies.

Industry trend

Persimmon said that its job cuts would save about 65m per year, meaning it could cope "efficiently" with its downturn in business.

The construction trade has had it coming for a while
Nick Smith, Huddersfield

Revenue was down 34% and sales on its order book were 30% lower than at this time last year, it added.

"We now have a lower level of overheads and structure appropriate for the current levels of business, whilst at the same time remaining well placed to achieve an increase in output whenever mortgage availability and the overall market improves," the firm said.

Persimmon is the latest housebuilder to cut jobs, with 2,000 jobs going at rivals Taylor Wimpey and Barratt Developments.

Last week, Taylor Wimpey shares more than halved in value after the firm announced 900 job cuts and said it had failed to secure an extra 500m of funding.

And Barratt is shedding up to 1,000 jobs in another blow to the troubled UK property market.

UK housebuilder share prices

Recession 'looming' for UK firms
08 Jul 08 |  Business
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Taylor Wimpey woes hammer shares
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01 Jul 08 |  Business
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25 Apr 08 |  North Yorkshire

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