Marshalls, a building products supplier based in West Yorkshire, is set to axe an additional 250 jobs as the UK’s housebuilding market slumps.
The company will also close a factory in Scotland and implement shifts and production reductions elsewhere, aiming to achieve an annual saving of £9 million.
The latest downsizing comes on the heels of the 150 job cuts announced at the end of last year.
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The company is also undergoing a restructuring of its commercial team.
Marshalls reported a 13 percent decline in like-for-like sales during the first half of the year ending June 30.
The firm is now expecting to report a 27 percent slump in interim underlying pre-tax profits, amounting to approximately £33 million.
The slowdown in demand for new-build homes has contributed to Marshalls’ profit warning, as prospective homebuyers face falling property prices and rising interest rates that make obtaining mortgages more challenging.
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The UK construction sector, including housebuilding, has been grappling with increased material costs, a shortage of skilled labor, and the uncertainties posed by Brexit.
To address the labor shortage, the government recently added bricklayers, plasterers, and other construction jobs to the “shortage occupation list,” making it easier for foreign builders to work in the country.
Marshalls’ landscape products division has been particularly affected, with half-year revenues slumping by 20 percent to £174 million due to its exposure to new-build housing and domestic refurbishment work.
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Marshalls said: “The sustained high levels of inflation, increasing interest rates and weak consumer confidence means that the board anticipates the group’s performance in the second half will be below its previous expectations.”
Bank of England policymakers are anticipated to raise the base interest rate by 0.25 percentage points when they meet, which may further impact the housing market.
