SHEPHERD Building Group is moving out of its sleek head office at Fulford Moor House in York and into new, smaller premises on the same site.

The huge family firm today announced that years of gradual job cuts and transfers which saw group head office staff numbers dwindle from more than 200 to about 75 were finally over.

The result was that the 41,000 sq ft Shepherd-built four storey block opened by Princess Margaret five years ago - which later earned a White Rose award as the best architecture in Yorkshire - was now too big for its purpose and therefore "less cost-effective".

And a plan would soon be submitted for a smaller building on the surrounding 3.5 acres or so of land, specifically on a site between Fulford Moor House and Mechplant in Hospital Bridge Road.

Given consent, the new building would be ready for occupation at some time towards the end of 2001.

No firm decision has been taken on the future of Fulford Moor House, which cost £4.4 million to build at the time and has an entire floor completely hidden from view to passers-by, but it is likely that the building will be sold or let to tenants.

Manpower cuts started as Shepherd's broad head office functions were devolved into the group's operating subsidiaries - part of a strategy of making each subsidiary within its three divisions of construction, manufacturing and development more self-sufficient. The bulk of the companies are either in The Mount, York, or in Huntington.

Moving into the new, smaller head office will be the corporate support team for the group board and staff in a smaller shared services centre, comprising a number of financial services, IT, group insurance and personnel

Paul Shepherd, group chairman and managing director said that in spite of fewer people operating out of head office there had been a big increase in manpower as a result of group expansion over the last few years.

He said: "Shepherd companies now employ more than 4,000 people. That is almost 500 more than two years ago.

"However, our companies are operating in diversified markets and, augmented by acquisitions at home and overseas, have become more autonomous. The new devolved structure now allows them to undertake many of the services previously provided by the centralised head office.

"Consequently, Fulford Moor House is simply too large for our current head office. Moving to smaller premises will help us to reduce costs and, thereby, improve our overall competitiveness which is of fundamental importance to the future of the group."