Taylor Wimpey firm imposes 20% payment cut

A Taylor Wimpey subsidiary company has sent letters to its subcontractors demanding they cut costs on existing orders by 20%.

The letter from George Wimpey Bristol contains the heading Cost Reductions –“Our Futures”, and warns that without the reductions, work will stop completely.

Commercial director Jason Wren writes: “Every build release and site start must be supported by cost reductions, and our requirement is 20% off all current orders.

“Unless this situation is taken extremely seriously and acted upon swiftly there is every possibility that sites will grind to a halt…which would not benefit either of us.”

Unless this situation is taken extremely seriously and acted upon swiftly there is every possibility that sites will grind to a halt

Jason Wren, commercial director, George Wimpey Bristol

Subcontractors are required to respond by 19 January, with the letter also containing the warning: “It is with you that we would like to continue trading but that can only be after careful consideration.”

Chief executive of the National Specialist Contractors Council Suzannah Nichol labelled the demands as “horrifying”, with contractors margins having already been squeezed.

Taylor Wimpey has suffered from the economic downturn and subsequent house building slump. It has debts of nearly £2bn and has cut almost 2,000 jobs.