HOUSEBUILDER McINERNEY has cut more than 500 jobs in a bid to combat the construction downturn and to return the business to profit.
The group yesterday published figures showing that it lost €22.1 million in the first six months of 2008, compared with a profit of €9.2 million during the same period last year.
The company has reduced staff numbers to 431 from 996, a total of 565. It is understood that McInerney began axing jobs in Ireland late last year as it became obvious that demand for new homes was slowing rapidly.
The group let 225 people go over a period of time as work on individual sites finished around the country. In Britain, McInerney shed 330 jobs, mainly in two redundancy rounds. Some staff were made redundant this week.
Chief executive, Barry O'Connor, did not comment on the actual numbers yesterday, but confirmed that the company reduced staff numbers as part of a cost-cutting programme. "It's regrettable as we had to let a lot of very good people go," Mr O'Connor said.
Most of McInerney's business is focused on building and selling starter homes in Ireland and Britain. Both markets were showing signs of a slowdown 12 months ago, but the credit crunch and the consequent rise in interest rates aggravated the situation.
The Republic's building industry is expected to be Europe's worst performer this year, with a fall of 17 per cent in activity. This will take around €6 billion out of the economy.
In Britain, Nationwide Building Society, the country's fourth biggest mortgage lender, yesterday reported that house prices have fallen 10.5 per cent over the last year, the biggest drop since 1990.
McInerney said yesterday it has cut €27 million off the value of its landbank. Mr O'Connor said this represented a reduction of 5 per cent.
However, he said that sales were showing signs of improving. "We had about 900 deposits at the end of June, 600 in the UK, which is down from 2007 when we had 800 deposits," he said.
The job cuts and other rationalisation measures cost McInerney €4 million, but Mr O'Connor said that they will result in yearly savings of €47 million.
