Everyone said consolidation would be good for housebuilding. But what about the 1500 people who will lose their jobs as a result?
The Beazer director was made redundant two weeks ago but still has nine months to run on his contract, he's now in limbo – sitting in his office waiting for the phone to ring. "Morale is very, very low," he says, although this was denied last week by Persimmon. "Those who have remained are working alongside people like me, floating around like the undead. I'm reading the trade titles. I've hardly been inundated with job offers yet."

The director is among the first of up to 800 Beazer employees facing the chop after its £537m acquisition by Persimmon, which was finalised in March. And although Persimmon is reticent about exactly who is marked for death – details will be made available "in the near future" – it seems that there will be more of them. Industry sources say the figure could rise to 1000 by the summer.

Then there are the 435 redundancies announced last week by Wimpey Group, in the wake of the merger of its McLean Homes and Wimpey Homes subsidiaries. Taylor Woodrow this week confirmed that its £535m acquisition of Bryant will lead to 150 job cuts. Redundancies are also expected at the privately run Wainhomes, which was snapped up by Wilson Connolly last month. This could bring the number of casualties across housebuilding to at least 1500.

So what does the future hold for the fallen? The Beazer director is not optimistic. "There's talk of a recession but the more immediate problem is the amount of consolidation that is likely to continue," he says. "People are not necessarily taking on staff, despite the fact that there genuinely are some very good staff at Beazer."

His concerns are backed up by others in the industry, who predict that the market for housebuilder executives will be glutted. Martin Donohue, chief executive of Westbury (which has not gone down the redundancy route), says the consolidation was necessary, but adds that the timing of the deals – all in the last six months – has made the shake-up more difficult for those handed their P45s. "The fact that they have all come out recently makes it a bit more poignant," he says.

Another factor peculiar to this reorganisation is that senior management will suffer more than site staff. Donohue reckons that "people in regional management roles will be a bit forlorn right now". This point is underlined by Roger Humber, a housebuilding consultant and former head of the House Builders Federation. "The housebuilding industry is facing an unprecedented situation where more senior managers are being made redundant than ever before," he says.

By contrast, site-based technical and construction staff are likely to find that their services are still in demand. "The industry has been complaining of a skills shortage for years so skilled, experienced staff are very marketable," says Humber. This view is backed by a leading recruitment consultant in the sector. "If a project manager came to me on a Friday then I would probably place the person in work on the Monday," he says.

The picture varies from region to region. Donohue thinks there will be little problem for anyone looking for work in the South-east, where the industry is overheating, but people made redundant in other regions, such as north-east England, may find it harder, he adds.

Not only do senior staff have poorer prospects, but they have been disproportionately affected. More managerial and administrative positions than site personnel have been cut in the Wimpey, Taywood and Persimmon deals. Wimpey has concentrated on closing centrally controlled departments such as purchasing and devolving it to the regions. Persimmon is understood to be terminating financial posts as well as administrative roles. Taywood has also focused on management and administration jobs.

Many of those who filled general roles could find work in other industries, but what about managers who only know about housebuilding? Analysts believe that those who are unable to find work as employees could strike out on their own, leading to a spate of small-scale start-ups.

More senior managers in housebuilding are being made redundant than ever before

Roger Humber, housebuilding consultant and former head of the House Builders Federation

"I could see two or three getting together and building 15-20 units a year," says one. Leslie Kent, sector analyst with stockbroker Seymour Pierce, adds: "The nature of the industry is entrepreneurial. I expect a lot of the people to resurface." This, however, is disputed by the Beazer director we met at the beginning of this article. "I would have thought that's a bit unrealistic given the capital required for such a set-up. A lot of us are still waiting for our redundancy packages anyway."

The director is more concerned at how the Beazer redundancy process is being handled. Senior staff point to the messy nature of the process, which has prompted John Low, Beazer's departing chief executive, to dispute his severance package with the help of lawyers. "There's been no consistency," the Beazer director points out. "You either get gardening leave, work your nine months out or get a financial offer." A Persimmon spokesperson this week countered: "From our perspective, we are endeavouring to proceed as sensitively and as effectively as we can in this consultation process."

It is not just the staff who lose their jobs who suffer. Personnel experts say the process also affects those who are left. Angela Baron, employee resources adviser for the Chartered Institute of Personnel and Development, points to what is known as "survivor syndrome". She says: "It's damaging because the people left behind feel threatened that they are going to lose their jobs or guilty because they still have a job and their friends don't."

The point is picked up on by other Beazer people, who compare their predicament to that of staff at Bryant and Wimpey. One source said: "Everyone was realistic and knew that the takeover would mean jobs would be lost, but it's the way it was done that really hurts."

Wimpey concluded its shake-up fairly swiftly after it announced the McLean/Wimpey Homes merger last December. "We have moved slightly quicker than we thought," a spokesperson says.

Bryant's takeover by Taywood was initially rather rocky – it took Taywood three attempts before agreeing the price – but the fall-out seems to have been fairly minimal. There were two high-profile departures – chief executive Peter Long and finance director Patrick Scannell – but no widespread bad feeling. One senior Bryant source says that was a result of the nature of the deal. He says: "By keeping the Bryant brand they also have to keep the infrastructure and the people. They have been intelligent." A Taywood spokesperson adds: "The deal was on the promise of growth, not downsizing."

By the same token, a deal like the Beazer takeover, in which two national businesses were merged and one was destroyed, was bound to end in casualties. As John White, Persimmon's chief executive, told Building a few months ago (9 February, pages 30-31): "You have to recognise that if it's a true merger then you can't afford to mess about. When you put two big businesses together, you need a clear strategy … Any merger proposing to take soft decisions would be well advised not to."

This point is taken up by a source close to the Taywood deal. "Persimmon have been much faster in their decision-making and more ruthless," he says, "but they'll see cost savings much faster. Taywood have been doing it by committee."