Australia's largest sawmilling company has stood down 51 workers in the south-west Victorian town of Colac.
AKD Softwoods has temporarily closed one of its two sawmills in the town of 12,500 people, as it prepares for a slow down in demand for its products.
The company, alongside construction industry bodies had been calling for the Federal Government to introduce an urgent housing stimulus to prevent the predicted downturn in new house builds.
Chief executive Shane Vicary said the flow-on effects from the coronavirus pandemic to the sector were imminent.
He said the manufacturing company could not wait any longer for government support.
"We've told other sawmills they're only going to work four days a week, so effectively reducing out production capacity by 20 per cent," he said.
"Pretty much all employees across the business have been asked to either reduce hours, or take a salary cut."
Mr Vicary said the decision was equally about reducing inventory and logistics.
"As an organisation with trucks, trailers, logs and lumber, I can't wait to see what might happen.
"I've got to make decisions about what I know is in front of me right now."
Repositioning the business
The company also has sawmills in Queensland and New South Wales and last week 800 of its workers were forced to take leave in a bid to prevent an oversupply of timber products.
Master Builders Victoria had forecast 159,000 new homes would be commenced next financial year but that has now been reduced to 115,000.
"This is about AKD positioning ourselves and preparing our inventory for a slow down," Mr Vicary said.
"I think the slow down is going to happen in June or July ... we're repositioning our business in light of what we think is going to be a smaller market."
Mr Vicary said it had been devastating to make the cuts.
"These are people you work alongside of.
"There are 34 people out at the Irrewarra Mill, some of them will get redeployed into Colac, but they'll be redeployed into positions that are currently held by casuals and the casuals will leave," Mr Vicary said.
The business will not qualify for the Federal Government's JobKeeper stimulus package.
"You qualify for JobKeeper if your business reduces revenue by 30 per cent and we're not there, so those people will qualify for JobSeeker."
