ONE of the biggest building firms in the South West has announced it is to axe 750 jobs after being hit by a sudden slump in business.

Rok – which is based in Exeter but operates offices across the South West, including Bristol – had been bullish about coping with the impending recession earlier this year.

The firm's chief executive Garvis Snook had said his company was well placed to cope with the downturn but that picture has changed dramatically in recent weeks with the loss of a series of lucrative contracts.

Yesterday, the self-styled "nation's local builder" was forced to admit it was cutting 15 per cent of its 5,000 workers as it struggles to cope with the collapse in the building market.

Much of the company's success in Bristol has come out of major repair and maintenance contract with the city council.

After admitting that projects worth more than £150 million had been shelved or cancelled in the public and private sectors following the banking crisis, shares in the firm slumped by 50 per cent yesterday, wiping £70m of the value of the business in the space of several hours.

As reported yesterday, at least 50 jobs will be axed at the company's Yeovil office.

The "speed and severity" of the downturn has prompted the firm to take drastic action and most of the jobs cuts will come in white-collar roles.

The firm was already planning to shed 350 jobs, but will cut an extra 400 staff as part of efforts to save £20m.

Profits will be £12m lower than expected as revenues fall by about £120m, the firm warned.

A spokesman said the firm had seen a "significant deterioration" in the money coming in from its contracting, small building works and social housing divisions. He said: "Although the group has been scaling back on building work to focus on repairs, refurbishment and response maintenance, the duration of Rok's projects is considerably shorter than for many in the sector and therefore the impact has been far more rapid."

Rok has also turned down several jobs where it was worried about customers' ability to pay or margins were too low to make it worthwhile.

The firm's order book now stands at £470m compared with £600m at the start of the summer.

It is hoped that the shift in focus away from construction to maintenance will safeguard the long-term future of the business and the firm will continue to recruit in this area.

Market analyst Howards Seymour said: "Rok's update is clearly disappointing given the scale and speed at which the local market has turned down, and the public sector aspect of this is obviously an area upon which the stock market will focus."