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UK-based construction firm Kier has announced 1,200 job losses, as part of a strategic review.

Following the announcement, more than 17% was wiped off the value of the company’s shares.

The review, costing an estimated £28 million (€31.4 million) was called for by Kier’s new chief executive, Andrew Davies, and is intended to produce annual cost savings of around £55 million (€61.6 million).

The company said 650 full-time employees will have left by the end of this month, with a further 550 departing by the end of the 2020 fiscal year.

As part of a business restructuring programme, Kier says it will now focus on core activities, including construction and road maintenance, after concluding that its current portfolio is “too diverse”.

Davies said, “Kier has a number of high-quality, market-leading businesses, in particular regional building, infrastructure, utilities and highways.

“I believe that these businesses will deliver long-term, sustainable revenues and margins and are inherently cash generative.

On the subject of the job cuts and the review, he said, “These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt.

“By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.”

He admitted, however, that Kier’s net debt at June 30 would be higher than expected, and the average month-end net debt for 2019 would increase to between £420 million and £450 million (€470 million and €503.7 million).