French contractor’s road business is particularly hard hit by European public spending cuts according to reports
Bouygues is to cut 2,400 jobs after it was hit by public spending cuts in the UK and across Europe.
According to the Financial Times, the French contractor’s road-building business, Colas, was the biggest cause of Bouygues’ 10% fall in first-half operating profit to €698m (£580m).
Colas suffered a net loss of €29m (£24.1m), with a 20.2% decline in operating profit at its central European operation, due to budget cuts in Hungary, Slovakia, the Czech Republic, Romania and Croatia.
Colas’ sales were down 2% to €5bn (£4.16bn) while Bouygues sales fell 1% to €14.7bn (£12.22bn).
Martin Bouygues, chief executive of Bouygues, said that Colas had suffered from a “very deep, very brutal recession” in the region and lost up to half of its revenues in some of these countries. One example was a recently scrapped €800m (£665m) motorway near Bratislava.
The job losses will take place mainly in Colas’ central European workforce, which will be cut from 7,900 to 5,500.
Mr Bouygues said his operations in Western Europe were less worrying, as more work is maintenance there: “You can put off maintenance for a year or two but not for long,” he said. “We are not worried.”
He alsom said that orders at the Bouygues’ construction division had risen 38% in the first half.