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Kier to cut 1,200 jobs as it seeks to cut costs Kier to cut 1,200 jobs as it seeks to cut costs
(32 minutes later)
Troubled construction and services firm Kier has said it will cut 1,200 jobs to help make cost savings of £55m a year from 2021. Troubled construction and services firm Kier has said it will cut 1,200 jobs as it seeks to make cost savings of £55m a year by 2021.
The cuts came as the firm's boss announced a plan to simplify Kier's business and reduce its debt.
The company will sell its homebuilding business, Kier Living, and will shut or sell other interests, including its recycling and rubbish processing units.The company will sell its homebuilding business, Kier Living, and will shut or sell other interests, including its recycling and rubbish processing units.
Kier said it would focus on businesses including construction and road maintenance. Kier will now focus on activities such as construction and road maintenance.
Shares in the company have fallen by more than 85% in the past year. Shares in the company have fallen by more than 85% in the past year, and they fell a further 9% in early trading on Monday, to about 119p.
The shares fell a further 9% in early trading on Monday, to about 119p. "These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt," said chief executive Andrew Davies, who took over the role in April this year.
"These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt," said chief executive Andrew Davies.
"By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.""By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders."
The company's woes are having ramifications beyond the construction world. The share price fall has affected its largest investor, Woodford Investment Management, which had to suspend its flagship fund after some of its investments lost value and investors withdrew their cash.
Profit warningProfit warning
The company's woes are having ramifications beyond the construction world. The share price fall has affected its largest investor, Woodford Investment Management, which has had to suspend its flagship fund after some of its investments lost value and investors withdrew funds. Of the 1,200 jobs being lost, Kier said 650 of the posts would have gone by the end of this month, while the remaining 550 jobs are expected to go next year.
Two weeks ago, Kier shares tumbled more than 22% after it issued a profit warning. The company added that several potential suitors had already expressed an interest in its Kier Living business.
At the time it said underlying profit would be about £25m below previous expectation. It blamed higher costs and problems at units in the road, utilities and housing maintenance businesses. Two weeks ago, shares in Kier tumbled more than 22% after the company issued a profit warning.
Last year, Kier launched a reorganisation aimed at cutting costs and selling non-essential businesses. At the time it said underlying profit would be about £25m below previous expectations. It blamed higher costs and problems at units in its road, utilities and housing maintenance businesses.