Redundancies come under plans for enlarged firm to save £50m annually
Vistry is to lay off around 100 staff as it seeks to find savings following its £1.1bn merger last month with rival Countryside, the firm’s new chief operating officer has revealed.
Earl Sibley told Building’s sister title Housing Today that the £2.4bn turnover firm had estimated that around 4% of the combined business’s 5,000 staff - approximately 200 people - would be put on notice of redundancy as part of the integration process of the two firms, though the ultimate figure to leave the firm will be lower. A spokesperson for Vistry later clarified that around 100 people or fewer are ultimately expected to depart the business.
The redundancies come as Vistry management looks to deliver the £50m in annual “synergy” savings promised when the deal was announced back in September.
Sibley said: “The track record of integration of businesses from this management team is very strong if you look at what happened with Bovis and Linden and Galliford Try in the creation of Vistry – it was very successful. We’re looking at a £50m annual run rate of synergies.”
He said the need to make the “restructuring and redundancies” was his only concern about the deal, given the impact on staff. This was because “the labour market now is not as strong as it was when we announced the merger. We’re in a more uncertain period [for the industry].”
He added: “We said we’re looking at [redundancy consultation for] around 4% of our 5,000-strong workforce, a couple of hundred people. It might end up a slightly lower number [to leave the business].”
The news comes as rival developers Telford Homes and Watkin Jones have recently revealed that they are cutting jobs in the light of the difficult economic environment.
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The Vistry announcement is not understood to be a response to the market, with Vistry’s large partnerships business – hugely expanded with the purchase of Countryside – insulating it against the drop in private reservations seen across the industry since October in the wake of the previous month’s mini-Budget from former chancellor Kwasi Kwarteng.
Vistry’s partnerships chief executive Stephen Teagle said last month the firm is looking to “amplify” its growth plans post-merger, with annual compound growth of around 12% expected despite the grim economic predictions. The division has been rebranded post-merger as Countryside Partnerships.
Vistry was this week revealed to have risen to 5th in the Top 50 Housebuilders tables, compiled on separate accounts filed prior to the merger being completed. The firms would together have a proforma combined turnover of £3.7bn, producing around 14,000 homes per annum.
Sibley said he was “cautiously optimistic” for the housing market next year, given the “stability” coming back into the mortgage market in recent weeks, and that Vistry had not dropped private sale prices.
“Employment is still good, some people are getting good pay rises, while [the] renting [market] is bonkers in many parts of the country, and the undersupply of housing gets worse by the year,” he added.
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