Carillion scales-back building arm offices

The South West has become the latest region to see Carillion scale-back its building division, as the company revealed it has cut nearly 40,000m² of office space since it acquired Alfred McAlpine.

It emerged last week that Carillion is closing its Exeter office and scaling back its Falmouth office in favour of Mowlem's former base in Bath. It is thought that the Falmouth office could close eventually too.

Around 150 jobs are expected to be lost in the building arm across the UK, at least 20 of which will be in the South West.

Carillion said it had projects in the region that would continue running for around 18 months to two years, but admitted that it has also withdrawn from the shortlist of the £28m Penwith College redevelopment in Cornwall.

A source close to the company said: "Everyone there is very upset about this because they were making money. The Falmouth office is basically the old E Thomas operation - this was part of Mowlem, which was taken over by McAlpine then Carillion.

"It had been one of the main regional contractors in the area for the past 80 years. Carillion doesn't want to work with one-off clients and is now only interested in framework deals. The Falmouth operation doesn't fit with that plan."

A Carillion spokesman said downsizing its building division was part of attempts to make integration cost savings across the whole business of £40m-a-year by the end of 2009.

A Carillion spokesman said: "Carillion is a lot more frugal than McAlpine, which had a lot more major offices for its £1.2bn revenue than Carillion had for £4bn revenue.

"We've been quite open in our interims, saying that our focus is on margin growth. We don't expect to grow the topline in UK construction revenue. Indeed, it may well decline a little in the next couple of years."