Pulte Homes cuts workforce

Homebuilders have been struggling with financial difficulties since the beginning of 2007, and layoffs in the industry are not uncommon. Ethan Harris, chief economist at Lehman Brothers, says there have been cuts already, but there’s more to come.

However, a large part of the layoffs and the resulting unemployment are not reflected in official statistics, because many of the construction workers are illegal immigrants. When the market slows down, contractors and illegals are the first to be fired.

Pulte Homes, one of the largest homebuilders in the U.S., announced it is going to cut workforce by 16%, or about 1,900 jobs. CEO Richard J. Dugas Jr. says that, despite laying off 25% of its employees, the company still isn’t small enough for the present market conditions. Pulte recorded a loss of $85.7 million in the first quarter of 2007.

In spite of it all, unemployment is currently at 4.5%, the lowest level in several years. Perhaps that is about to change…