The 800-strong contractor starts redundancy process and reveals plans to appoint new southern managing director

Contractor Shepherd Construction has started a redundancy process with its 800 staff which will see the firm restructure and appoint a new director responsible for business in the south.

A spokeswoman for Shepherd was unable to confirm reports that 60 staff will be laid off in the move, saying it was too early to say how many would have to go because new posts were also being created.

The new appointment of a divisional managing director for the south follows the departure in April of incumbent Clive Perceval, who has been in the post since 2007.

Shepherd said in a statement the restructuring had been prompted by the general construction downturn and exacerbated by the stalling of the government's programme to re-build further education colleges. In April Building reported it was owed £15.5m by the developer of the collapsed Trinity Walk shopping centre in Wakefield, with little prospect of getting the cash back unless the scheme is bought out of administration and re-started.

It is now predicting revenues of £260m for 2009/10, a 21% fall from the £330m it turned over in 2007/8, its last published accounts.

As well as a new southern managing director, the firm is also to appointment a board-level business development director, in a bid to win more business outside of its regular customer base.

The firm declined to give further details of the firm's proposed changes, besides saying they would affect “head office and regional operating divisions.”

Allan McDougall, Shepherd Construction's chief executive said tough times had necessitated “some very tough decisions.” He said: “We needed to re-align the business to ensure we remain strong in the light of the continued downturn in the construction market. We have always focused on employing and developing the best people in the business and while it is regrettable we have to make some job cuts, this focus will remain.”