Wolseley, the troubled building materials supplier, today announced it will axe a further 2,300 workers, bringing the total number of British job losses to over 20,000 in less than a week.

The company had previously announced 5,000 job cuts, mainly in North America where it has been hit by the severe downturn in the construction and housing industry.

However, 2,000 British jobs will be lost in the latest round of cuts, with the remaining 300 positions taken from its overseas operations.

The redundancies follow swingeing cuts at a number of British companies in the last week, led by BT, which will reduce its workforce by 10,000 by the end of its financial year.

It also emerged yesterday that Citigroup, once America's largest bank, will make a further 52,000 cuts, with the 2,000 jobs expected to go in London. Yesterday, the CBI said it now expected UK unemployment to reach nearly 3 million by next year.

Wolseley has now made job losses totalling 14,300 since August 2007. Shares in the group fell 10 per cent, or 26p, to 245p in early trading this morning.

The company said the latest cuts, which it anticipates will save £103 million a year, were necessary to protect it from the further deterioration it was anticipating in the building trade. It also plans to close 200 of its branches.

Wolseley said the job cuts would help it stay within the lending rules set by its bankers. Its net debt has risen 8 per cent to £2.7 billion since July 31, largely because of exchange rate movements.

Chip Hornsby, chief executive of Wolseley, said this morning: “While these results reflect a further deterioration in the business environment in the first quarter, it was not unexpected and we continue to react swiftly to market conditions with aggressive but measured cost reduction.

“In these unprecedented circumstances, the key priorities remain driving cost reduction and enhancing cash flow to ensure the group remains compliant with its banking covenants”.

Wolseley, which is the world’s largest supplier of plumbing and heating tools and one of the biggest building suppliers, said it expected trading conditions to worsen but added that the “scale of the market deterioration” was in line with its previous guidance issued in September.

The group said that pre-tax profit had slumped by 45 per cent, in the three months to the end of October against the same period last year.

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