900 job losses at Taylor Wimpey after failure to secure funding
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by Lin Freestone
Taylor Wimpey has failed in its bid to secure extra funding of Â£500m, which was needed to see it through the credit crisis.
It is rumoured that the firmâ€™s finance director, Peter Johnson, will step down with immediate effect and not wait until the end of the year as expected.
The companyâ€™s major markets are experiencing a significant downturn, with lower weekly sales rates and lower average selling prices than in recent years.
It is expecting that the UK housing market will remain weak through the second half of 2008, and does not expect there will be any short-term recovery.
The company, which includes Taylor Woodrow and Spanish subsidiary Taylor Woodrow de Espana, currently has 39 regional offices, of which one third will close. Approximately 900 jobs will be lost by the cost-cutting measures.
It is considered that the focus on trimming costs and the cutting of the price of its homes, will boost the firmâ€™s sales and improve cashflow.
Reservations of new houses were 45% lower in the 26 weeks to the end of June than they had been during the first half of 2007. During the first half of 2008, 29% of orders were cancelled, compared with 19% a year previously.
The firm announced earlier this week that it expected to write off the value of its land bank and work-in-progress by about Â£550m in the UK.
Taylor Wimpey was formed in 2007 by the Â£4.32m merger of Taylor Woodrow Plc and George Wimpey Plc to create the UKâ€™s second biggest housebuilder. Peter Johnson, the finance director of Taylor Woodrow, was instrumental in the merger of the two companies.
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