The world's biggest supplier of pallets, Brambles, will cut 750 jobs and scrap nearly 9 per cent of its pallet stock as it seeks to weather the recession in its key US and European markets.

A slump in consumer spending has led to a contraction in core sales, sending half-year net profit down 28per cent.

Brambles' shares plunged 75c, or 11.72 per cent, to close at $5.65.

Brambles posted a net profit of $US212.8million ($A321.6million) in the six months to December 31, down from $A443.8million a year earlier.

The ''challenging and volatile'' economic environment prevented Brambles from issuing updated profit forecasts for the full year.

In November, the company forecast 2009-10 operating profit to be in line with the previous year.

Chief executive Mike Ihlein said there had since been a ''further sharp deterioration in trading conditions around the globe'' that had affected Brambles' businesses.

''For all businesses, not just ours, these are not easy times.

''Consequently, that makes the provision of specific items quite difficult, and to do that with any confidence is quite a challenge.''

The United States is in the midst of a credit crisis that lies at the heart of the worst global recession since World War II. The US labour market has lost 3.6 million jobs since December 2007 as companies from Wal-Mart to General Motors slash jobs, sparking a sharp slowdown in consumer spending and a downturn in demand among some of Brambles' largest clients.

Brambles announced that, in response to the economic downturn, it will cut jobs, eliminate excess pallets and accelerate its pallet-quality and efficiency program.

The initiatives will cost $A199million this financial year.

About 750 staff, or 6.1 per cent of total employees, will be axed over the next 12 months.

''They'll come from all functions in a number of countries and facilities around the world,'' Mr Ihlein said.

''This is not just targeted at sales or finance or whatever, there are specific requirements in certain countries, and beyond that I shouldn't comment.''
 The first of the redundancy notices were given to workers yesterday.

The job cuts will cost up to $A105.8million during the next 12months but will deliver up to $A75.5million in annual savings from the middle of fiscal 2010.

Brambles will also accelerate the destruction of seven million of its 80million CHEP pallets in the US, at a one-off cost of $A150 million. Good-quality timber from the pallets will be recovered for future repair operations.

Brambles also said it would increase its investment in a two-year pallet quality program in CHEP USA by $A90.6 million to achieve optimal services, pallet qualities and cost efficiency by December this year.

The cost-cutting measures were designed to make the business more flexible while still being able to meet customers' requirements, Mr Ihlein said.

''When key customers and key markets return to growth ... provided we continue to win new business, we will be well placed for the long term.''