Barratt to cut 1,200 jobs

Jul 10 2008 By Graeme Whitfield

Newcastle-based house builder Barratt Developments is to cut 1,200 jobs.

It announced the losses as it agreed a deal with its lenders to strengthen finances amid the property market woes.

The group, which warned last week that about 1,000 jobs were under threat, said average private sales are down 43% year-on-year in the past six months.

Barratt said it had struck a ``prudent" deal to extend the repayment of £400m of debt and had renegotiated its banking agreements in a move seen as giving the group vital breathing space.

Shares in Barratt opened 25% higher in the City on news of the refinancing deal.

Barratt is cutting 18% of its 6,700 workforce and shutting offices in Chester and Sheffield to save costs in the face of falling sales and property prices.

It is also merging a further eight divisions into four under plans to cut annual costs by about £40m half of which should be saved this financial year.

Mark Clare, group chief executive, said: ``By enhancing our sales capability, reducing our costs, and agreeing a new financial package, we have now substantially improved our competitive position and are better placed to deal with what will be a very challenging period ahead."