Thousands of workers at JCB’s British assembly plants have voted in favour of a £50 a week pay cut to prevent 350 staff losing their jobs. More than 4,000 employees will now work a 34-hour four-day week as the maker of the yellow diggers and other machinery faces up to the harsh realities of the economic slowdown.

The news came on a dark day for jobs, as Wolseley, the heating and plumbing group, said it would close almost a third of its US branches and cut 3,000 jobs, while Chrysler and GM, the American carmakers, said they were laying off thousands more staff.

JCB, which employs 5,000 people in the UK and 8,000 worldwide, has seen a sharp fall in demand for its products and decided last week to cut output at its UK factories by 19 per cent, putting 500 jobs at risk. However, after a week of talks with the GMB union, both parties agreed to put shopfloor workers on a shorter week to save the bulk of the jobs. About 150 workers will still be made redundant by the year end.

GMB members voted more than two to one to accept the move to the shorter week, which starts next month for a minimum of six months. Factories affected include sites in North Wales, Cheshire and Staffordshire. Part of the lost pay will be made up in redundancy money.

JCB cut 400 jobs in July after a slow start to the year as builders struggled. The group said that as the year progressed business confidence worsened and demand growth from emerging markets also slowed. Its customers are being squeezed as construction work dries up and finance for new equipment becomes harder to arrange.

Matthew Taylor, JCB’s chief executive, said the outcome of the vote was positive as it allowed the company to retain more of its skilled workforce, putting it in a strong position when the market recovers. JCB, which is owned by Sir Anthony Bamford, has expanded rapidly in recent years selling more than 72,000 units last year, against 36,000 in 2004. Last year the company had record sales of £2.25 billion, making a pre-tax profit of £187 million.

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