Building materials group Saint Gobain is to lose 4,000 jobs this year across its businesses in the US, the UK and Spain.
The global economic downturn and the weakness of the US economy in particular is to blame, along with rising input costs.
A spokesman for Saint Gobain told buildersmerchantsjournal.net: ” In the UK this will result in a reduction of 1,100 in 2008, out of a total of over 19,000 employees. The majority of these cuts have already been realised and it is anticipated that the balance will be achieved by the end of the year through the departure of temporary staff, a freeze on recruitment, a halt on replacing employees who leave or retire and, regrettably, there will also be a need for some redundancies.
“These measures are necessary in the current economic climate to ensure that all our businesses can remain competitive, healthy and sustainable in the long-term; delivering what customers need, and competing in an international market place.”
The group’s first half results show revenue up slightly – 4.9% at constant exchange rates to €22bn – with the market holding up reasonably well in western Europe, despite the sharp downturn in both the UK and Spanish markets in the second quarter.
The Building Distribution Sector – which includes Jewson and Graham in the UK – boosted sales by 5.4%, helped by recent acquisitions. Lower demand in the UK and Spain was partly offset by high demand in both France and Scandinavia. Operating margin in this division was down to 4.7%, compared with a record high a year ago of 5.2%, mainly because of lower profitability in the UK and the impact of acquisitions.
The Group is not expecting the US market to recover this year and also believes the market in Europe will “continue to lose steam – particularly in the UK and Spain”.