Nexity will cut 502 positions to deal with the deep construction crisis, the leading French real estate developer announced on Thursday.
“We have confirmed to our social partners that the information-consultation process prior to the deployment of a job protection plan will be initiated and it will concern the elimination of 502 positions,” the deputy general director declared to the press. of the group, Jean-Claude Bassien.
“We continued our actions in terms of reducing our operating cost base,” he also underlined.
A plan estimated at around 50 million euros
This social plan was announced at the end of February, without the group specifying how many positions would be affected. “There will be no departure under the PSE before the fall, and rather the end of October,” specified Jean-Claude Bassien, taking into account the legal procedures.
The cost of this plan for the group is estimated at around 50 million euros, indicates Nexity in a press release, which plans to derive 36 million euros in savings from 2025, then 45 million per year.
The workforce in the Promotion-construction division is affected, which will have decreased by 27% compared to 2022. That year, Nexity employed some 2,800 people in its promotion branch.
“I need us to move faster. Over time, companies may have tended to lose agility,” commented Véronique Bédague, CEO of Nexity, in Le Le Figaro. “By 2026, we are targeting savings of 95 million euros,” she adds.
Nearly 400 people have already left the group even before the implementation of the social plan, denounced the CFDT union delegate for this branch, Emmanuel Brie. “We are going to fight so that there is as much mobility and voluntary departures as possible,” he declared.
The leading French real estate developer employed 8,185 people at the end of 2023, or around 300 fewer than at the end of 2022, the group having already implemented a non-replacement of departures to adapt to the economic situation.
Since then, some 3,100 additional employees have left the group during the sale of the subsidiary Nexity Services (now Evoriel) to the Bridgepoint investment fund. The cash obtained from this sale (400 million euros) will be used to reduce debt and allow Nexity to implement its restructuring “without delay”.
Other social plans among competitors
This social plan is the most important announced this year by a developer, the real estate subsidiary of Bouygues having announced 225 future job cuts, while Vinci Immobilier has announced a social plan which is not currently quantified.
Like its competitors, Nexity is caught between rising construction costs, caused by material prices and stricter environmental regulations, and the collapse in demand, caused by difficulties in accessing credit and the end progressive tax incentive schemes.
The French Building Federation is counting on 90,000 job losses in 2024 across the sector.
“Low of cycle”
In the first quarter, Nexity’s housing reservations fell by 29% in number and 22% in value compared to the first quarter of 2023, indicates the group, specifying however that retail sales (to individuals) were no longer falling.
“We are clearly at the bottom of the cycle,” said Jean-Claude Bassien. The group’s turnover fell by 14% to 770 million euros.
The promoter hopes to move forward, noting some positive indicators for the future, notably the slight decline in credit rates, or the fact that reservations are picking up, due to the group’s efforts on its sales prices.
But the structural housing crisis is not about to end, warned CEO Véronique Bédague. “I don’t see any rapid improvement in the situation. Each drop in interest rates will give us some breathing room, but it will take time. And there will always be a delay between the announcement of a reduction and the moment when banks start lending again,” she said.
The group’s restructuring plan also involves increased decentralization and savings on “general and real estate costs”, which, together with the reduction in payroll, are expected to reduce its costs by 95 million euros per year.
To alleviate the crisis in real estate development, Nexity has committed to diversification, by launching into solar energy or savings products. It also intends to accelerate its development in the transformation of spaces already built to anticipate the imperatives of zero net artificialization.