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Stock Building Supply to cut 3,000 jobs, shutter 86 facilities

Posted October 23, 2008

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— Plunging home construction starts in the U.S. are triggering major layoffs and a corporate restructuring at Raleigh-based Stock Building Supply.

The firm, which is part of Europe-based Wolseley, will lay off 3,000 of its 12,000 workers, close 86 facilities and cease operations in 16 markets, the parent company announced Thursday.

The restructuring will leave Stock with 209 branches in 27 states, down from 33.

How many workers in Raleigh will be affected is not yet known, a company spokesperson told WRAL.com. Stock has some 1,100 employees in the Triangle area.

Since it employed 20,000 people in 2006, the latest round of layoffs will bring Stock’s manpower to 45 percent, or some 8,700.

The layoffs are to be completed by January.

“Without a doubt, we are facing unprecedented times in our industry,” Stock President Joe Appelmann said in a statement: “There is over-capacity in an industry geared up to supply 2.3 million new housing starts two years ago; today, the number is less than 1 million. The realities of the current market have changed the capacity of our industry and necessitated these actions.”

Stock currently operates in 33 states. Wolseley noted that 70 percent of its revenues come from residential housing and pointed out that U.S. housing starts have plummeted 64 percent from January 2006.

The cutbacks are only the latest Wolseley has made at Stock. Stock has already shed 40 percent of its employees and shuttered 70 branches in the past 20 months.

“The board believes that for the foreseeable future, there is likely to remain significant over-capacity in the building materials distribution segment, in which Stock operates,” the company said. “Despite this, the board concluded that there remains significant potential to create long-term value in the business.

“Over the last six months, the board has explored four principal options, including outright disposal, a joint venture with another party, complete closure and a significant restructuring of the business,” the firm added.

“Given the current unprecedented conditions in the global financial markets, concluding a transaction with a third party that recognizes this long-term value and that is financeable has not proved possible. In addition, it was decided that closing the operations entirely is not an appropriate strategy, since it would be highly destructive of shareholder value by depriving shareholders of the opportunity to benefit from a market recovery."

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  • Xiaoding Oct 24, 2008

    The amount that they no longer give will be made up by the amount of waste that will no longer be produced. the employees can find jobs that actually produce something of value, instead of McMansions that fall apart in ten years, and stupid granite countertops.

  • gsm2456 Oct 24, 2008

    I am sure that it is easy to say that they gave you bad service or they did not hirer you, so good riddance? But seriously, not only are these people jobs at risk, but the community as well. You have no idea how much SBS contributes to the community. They give tons and tons of supplies to Habitat for Humanity, Salvation Army and many more. If this company closes, those charities are in jeapordy too. So please think about the whole picture rather than just yourself for once.

  • seeingthru Oct 23, 2008

    well i hate to see people losr their jobs but this building frenzy bubble had to burst sometime.....nothing is forever.

  • bbad238 Oct 23, 2008

    This shouldn't come as a big surprise, they were laying off people a long time ago! I'm glad I never got the job I applied for with them. They sure did act high and mighty at the time and look where they are now.

  • DontBelieveTheHype Oct 23, 2008

    "The Board believes that for the foreseeable future there is likely to remain significant over-capacity in the building materials distribution segment"

    Meanwhile, the Board has over-capacity in their paychecks. Frustrating!!!

  • momof5 Oct 23, 2008

    The Durham store has already closed.

  • Mr. Keeping It Real Oct 23, 2008

    Not a surprise - two builders in our neighborhood are recycling two of LAST year's homes in the Parade of Homes because they haven't sold yet. People want to move - they just can't sell their homes. Everything is getting ready to come to a screeching hault.

  • momof5 Oct 23, 2008

    "Good riddance! I cheer whenever a building realted business goes under, bunch of scam artists. The Ponzi scheme if finally winding down."
    "Xiaoding"

    You know it's people like you who know NOTHING about the building industry that really tick me off. These layoffs do not affect the "head honchos", they affect the guys who work in the yards, drive trucks, the people in the offices, the salesmen who work on commission.

    I hope you sleep well tonight knowing your job is safe.

  • oneday8035 Oct 23, 2008

    I heard that this Friday the Stock in Durham will close.

  • Arkansas Razorback Oct 23, 2008

    Builders First Source will close their location on 98 next Friday.

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