Builders' merchant Travis Perkins will slash 2,500 jobs
Builders’ merchant Travis Perkins will slash 2,500 jobs and close 165 stores amid fears coronavirus recession will hit trade for at least two years
- The firm said it comes as it expects the recession to hit them for about two years
- Bosses plan to close 165 stores – mainly focusing on smaller Travis Perkins sites
- The redundancies make up around 9 per cent of the total workforce, firm added
- The store closures have also reduced Travis Perkins’ portfolio by up to 8 per cent
- Here’s how to help people impacted by Covid-19
Around 2,500 workers are set to lose their jobs at builders’ merchant Travis Perkins amid fears over the coronavirus recession.
The company, which also owns Toolstation and Wickes, said the decision comes as it expects the downturn to hit the trade for at least two years.
Bosses plan to close 165 stores – mainly focusing on smaller sites – but said there were encouraging signs building work is returning.
Travis Perkins, which also owns Toolstation and Wickes, said the decision comes as it expects the recession to hit the trade for at least two years (file photo)
Chief executive Nick Roberts said: ‘Whilst we have experienced improving trends more recently, we do not expect a return to pre-Covid trading conditions for some time and consequently we have had to take the very difficult decision to begin consultations on the closure of selected branches and to reduce our workforce to ensure we can protect the Group as a whole.
Chief executive Nick Roberts said ‘we do not expect a return to pre-Covid trading for some time’
‘This is in no way a reflection on those employees impacted and we will do everything we can to support them during this process.’
The cuts come after a week in which UK companies announced redundancies in excess of 60,000, including cuts from Centrica and BP.
Businesses are concerned the recession, which is predicted to be the harshest in living memory, will take years to recover from and some firms may collapse.
Economists and experts also predict the unemployment rate could return to levels not seen since the 1980s.
Travis Perkins furloughed 15,000, or half, its staff for the first three weeks of lockdown and its board and management took a 20 per cent pay cut from May 1 until August 1.
The firm said: ‘While there has been a significant recovery in trading volumes in recent weeks, it is evident that the UK is facing a recession and this will have a corresponding impact on the demand for building materials during 2020 and 2021.’
Sales were down 40 per cent in May compared with the same month a year ago, but there have been strong sales in Wickes (file photo) and Toolstation as households take to DIY
The redundancies make up around 9 per cent of the total workforce, the company added, with the store closures reducing its portfolio by 8 per cent.
The company said: ‘Branch closures will be concentrated in the Merchant businesses, in particular the Travis Perkins General Merchant, focusing on small branches where it is either difficult to implement safe distancing practices, or where marginal profitability will be eroded in a reduced volume environment.’
Travis Perkins added that over the past six weeks more branches have been opening – DIY stores were deemed ‘essential’ and allowed to remain open during lockdown.
At the end of last week, the company, which also owns Toolstation (pictured), had cash deposits of £363million alongside an undrawn overdraft of £400million with its banks
Sales were down 40 per cent in May compared with the same month a year ago, but there have been strong sales in Wickes and Toolstation as households take to DIY.
Its general merchanting business is operating well, it said, with builders returning to homes to continue or start new residential jobs following a relaxing of rules on going back to work.
But plumbing and heating is ‘recovering more slowly as a greater proportion of plumbing work requires tradesmen to work in people’s homes’, it added.
At the end of last week, the company had cash deposits of £363million alongside an undrawn overdraft of £400million with its banks.
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