Bovis Homes is axing an extra 200 jobs and scrapping its final dividend as the housebuilder slashes costs amid a sharp fall in demand for new homes.
In total, Bovis said headcount will be 60 per cent lower by the first quarter of 2009 than at the start of 2008.
The firm has already made 400 of its 1,000 strong workforce redundant in the face of a declining UK housing market.
Over 2008, the group sold just 1,817 homes compared to 2,930 in 2007, while the average sale price fell to £150,800, from £179,500 last year.
However, the cost-cutting has enabled Bovis to stay in line with profit expectations for 2008, the firm said.
The group's aim in 2009 will be to sell existing stock, the majority of which are houses rather than apartments.
"The outlook for the housing market, combined with that of the wider economy, appears challenging at present," Bovis said in a statement.
"Confidence is low, bad news predominates, and corrective economic actions which have worked historically have not yet seen a positive response."
But the housebuilder said the fall in prices and a historically low interest rate will help affordability, and when consumer confidence returns, the firm will be well-placed to take advantage of a rise in sales.
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