Travis Perkins to cut 2,500 jobs as recession hits construction

Travis Perkins plans to cut 2,500 jobs and shut 165 branches to cut costs as the recession caused by Covid-19 hits the construction industry.

The job cuts will cover about 9% of the building materials supplier's workforce and the closures will affect 8% of its branches, the company said.

The FTSE 250 company shut all its branches in late March to comply with the government's Covid-19 lockdown. It started reopening outlets in early May and volumes in May were about 60% of those a year earlier with the trend improving as the month went on, Travis Perkins said in a trading update.

But the company said with the UK in recession there would be weaker demand for building materials in 2020 and 2021 and cuts were needed. Travis Perkins said closures would mainly be in its merchant business, concentrating on small branches where social distancing is difficult and outlets whose profit would be wiped out by lower sales.

Chief Executive Nick Roberts said: "Whilst we have experienced improving trends more recently, we do not expect a return to pre-Covid trading conditions for some time and consequently we have had to take the very difficult decision to begin consultations on the closure of selected branches and to reduce our workforce to ensure we can protect the group as a whole. This is in no way a reflection on those employees impacted and we will do everything we can to support them during this process."

Travis Perkins is the latest company to make thousands of job cuts following announcements by British Airways, Centrica and Rolls-Royce. Travis Perkins furloughed workers and took government help in the early stages of the crisis but the cuts raise concerns that for many companies state support delayed drastic action caused by plunging demand.