Pulte To Cut 16% of Work Force Amid Weak Housing Market
Facing a grim housing market, Pulte Homes said Tuesday that it is cutting about 16% of its work force, or about 1,900 jobs, as part of a restructuring.
Pulte , one of the nation's leading homebuilders, said the restructuring will save an estimated $200 million a year before taxes.
"The homebuilding environment remains difficult, and our current overhead levels are structured for a business that is larger than the market presently allows," Richard J. Dugas Jr., president and chief executive, said in a news release.
Pulte said it expects to take pretax charges of $40 million to $50 million for the restructuring, mostly in the second quarter of 2007.
Bloomfield Hills-based Pulte reported losses of $85.7 million, or 33 cents a share, and revenue of $1.9 billion in the first quarter of 2007. It earned $262.6 million for the same period last year, or $1.01 per share, on revenues of $3 billion.
It had about 11,900 workers before the cuts, down from 12,400 employees in 2006 and 13,400 in 2005.
"At the conclusion of this reorganization, we expect to employ just over 10,000 people," Pulte spokesman Mark Marymee said in an e-mail message Tuesday evening.
Pulte operates in 50 markets and 26 states, delivering 41,487 homes in 2006, according to its Web site.
Privately owned housing starts in April were running at a seasonally adjusted rate of 1.53 million, down 16% from 1.82 million a year earlier, the U.S. Census Bureau said.
Inventories of unsold homes have been growing nationwide, and other homebuilders also have reported weak results.
D.R. Horton , the nation's largest homebuilder by deliveries, said its first-quarter profit dropped 85%, while Lennar's quarterly profit fell 73%.
The National Association of Realtors this month lowered its projections for existing home sales to 6.29 million this year, a decline of 2.9%. It previously expected a 2.2% dip.