USG, the worldwide manufacturer of building materials, posted lower second-quarter earnings of $56 million, down 68.2 percent from $176 million in earnings last year.
Sales fell 10 percent to $1.41 billion from $1.57 billion last year.
“The housing recession is entering the second year of what is likely to be a multiyear downturn," said William Foote, chairman and CEO. "We took further action during the quarter to adapt our operations to market conditions by eliminating approximately 500 salaried positions.”
The company has already eliminated more than 1,100 positions in the past year and removed about 2.5 billion square feet of wallboard manufacturing capacity. Foote said the company planned to halt an additional 350 million square feet of wallboard capacity in Detroit late in the third quarter.
"This market is burdened by an excess supply of new and existing unsold homes,” Foote added. “The unusually large inventory of unsold homes will depress new construction and put continued pressure on volumes and prices of building materials until the excess inventory is absorbed.”
Chicago-based USG serves residential and non-residential construction markets with wall, ceiling, flooring and roofing products.