Worldwide distributor of plumbing and heating products Wolseley Plc has announced the axing of 3,000 jobs today in its first Interim Management Statement.
The company is planning to reduce its operating costs by reducing its workforce in North America by 1,700 people. A further reduction of 1,300 staff is planned for the second quarter.
The job cuts are expected to save Â£60 million per year for Wolseley. Revenues and trading profits were down in its North American business by 3% and 25% respectively for the three months ending 31st October 2007.
Europe fared significantly better in the period. Revenue was up over 25% and trading profit was up over 15%. Although there was a poor performance in France and Central and Eastern Europe, this was largely offset by a better set of results from the UK and Nordic region.
Overall the group reported that its revenue had increased 8% in constant currency in the three months ended 31st October. However trading profit had decreased by 9% in constant currency in the same period.
Operating cash flow was over twice that the company achieved last year however pretax profit was down 10% in constant currency for the months August-October 2007.
The company reported ten bolt on acquisitions completed between 1st October and 28th worth an aggregate consideration of Â£170 million.
The Chief Executive of Wolseley, Chip Hornsby said, Although sales trends and the outlook are uncertain, we remain committed to our strategy. Whilst keeping a tight control on costs, we will continue to invest to create competitive advantage.
We remain confident that with our size, scale and financial strength, we will emerge from this slowdown as a stronger competitor with an excellent platform for future growth.