Australia's Boral cuts 700 jobs, shares hit 18-month high

SYDNEY Tue Jan 15, 2013 7:34pm EST

SYDNEY Jan 16 (Reuters) - Australian building materials maker Boral Ltd said on Wednesday it will cut 700 jobs across the country, aiming to reduce costs in a weak housing construction market.

Boral shares jumped 7 percent to an 18-month high on news of the cuts, which the company said would save A$90 million a year, with A$37 million savings expected in full year 2013.

"The restructure ... will transform the group into an organization that is more responsive to the realities of a cyclical marketplace," Boral's managing director Mike Kane said in a statement, adding that conditions had been challenging for some years.

Boral, which had 14,740 employees in June 2012, said total employee numbers would fall by about 1,000 in 2013 as a result of the restructure and other recent initiatives. The cuts would affect functional, operational support and managerial positions.

On Monday, Australia's largest steelmaker Bluescope Steel Ltd said it would cut 170 jobs at its Western Port plant in Victoria state over the following months.

Australia's unemployment rate stands at 5.2 percent currently, but analysts expect the figure will rise to 5.75 percent by the end of 2013 without further monetary easing.

A survey by Australia and New Zealand Banking Group showed job advertisements in newspapers and on the internet fell again in December, a tenth straight month of decline that pointed to softer demand for labor.

Australia's official job figures, due on Thursday, are expected to show employment was flat in December, nudging the jobless rate up to 5.4 percent.

Boral shares last traded up 6.8 percent at A$4.65. (Reporting By Maggie Lu Yueyang; Editing by Richard Pullin)