Pulte Homes announced Wednesday that a 16 percent slashing of its workforce is part of a companywide restructuring plan designed to reduce costs and improve operating efficiencies.

According to a press release, the company expects to incur a previously unforecasted pre-tax charge in 2007 in the range of $40 million to $50 million in connection with the restructuring plan, the majority of which will be incurred in the second quarter of 2007. This charge primarily consists of severance costs and includes facility-related expenses associated with consolidating certain administrative activities."The home building environment remains difficult, and our current overhead levels are structured for a business that is larger than the market presently allows," says Richard J. Dugas Jr., President and CEO of Pulte Homes.

"Despite reducing our workforce by approximately 25 percent in 2006 and early 2007, we find it necessary at this time to further reduce overhead expenditures, including, unfortunately, reducing an additional 16 percent of our jobs," Dugas says. "Workforce reductions are an extremely painful reality in the industry at this time, and we wish our former associates the best."

Pulte Homes says it lost $85.7 million, or 31 cents per share, in the first quarter of 2007.

Details on what departments and where the cuts will hit hardest were not released but published reports are estimating that 1,900 jobs will be cut. The Bloomfield Hills, Mich.-based company operates in 50 markets and 26 states. In 2006, Pulte Homes built 41,487 homes and generated $14.3 billion in consolidated revenues. In the company's 57-year history, it has constructed nearly 500,000 homes. Calls to Pulte Homes regarding this issue were not returned at press time.

Pulte's impending layoffs comes on the heels of a small contingent of union workers staging a brief protest outside of the Four Seasons Aviara hotel in Carlsbad, Calif., last week, as part of a larger effort to pressure Pulte Homes to get its HVAC and drywall contractors in Nevada and Arizona to accede to union demands for better working conditions.

Eyewitnesses said that about 10 workers were milling around the periphery of the hotel's grounds on the morning of May 23. That afternoon, Pulte's CEO was appearing as part of a panel of chief executives during the BUILDER 100 conference being held at the hotel. A Pulte spokesperson alerted BUILDER staff before that panel discussion that union workers might try to get into the meeting, as they did the previous week when Pulte held its annual shareholders meeting in Michigan.

Union representatives told BUILDER that they are targeting Pulte because it is one of the largest builders operating in the Phoenix and Las Vegas markets where, these reps contend, contractors that Pulte uses are not providing adequate working conditions, including immediate medical attention for workers that get hurt. The sheet metal and drywall unions in those markets currently do not have penetration into the residential construction field.

Pulte Homes was No. 3 on the 2006 BUILDER 100 list.

Learn more about markets featured in this article: Phoenix, AZ.