UK firm Cattles, which offers loans to risky borrowers, is planning to cut 1,000 jobs after its business was hit by the effects of the credit crunch.
The sub-prime loans firm says it must cut costs as it expects its Welcome Finance personal lending arm to cut new business by three-quarters this year.
The 1,000 job cuts, which includes the closure of its Hull operation, accounts for about 20% of the firm's workforce.
The firm said the move would allow it to weather current economic conditions.
It is estimated that about 400 of the 1,000 Cattles jobs to go will be in Hull, with the majority being lost in the Welcome Financial Services arm of the business - which has two call centres in the city.
Survival plan
Cattles is in talks with banks over refinancing, and last month revealed it was seeking to raise £200m from shareholders to bolster its finances.
In the wake of the US housing slowdown and a sharp rise in defaults among risky borrowers, it has become increasingly hard for banks to raise capital.
Cattles - which trades as Welcome Financial Services, the Lewis Group, and Cattles Invoice Finance - aims to offer financial services to those without access to mainstream facilities.
The firm said it would cut new business volumes at its main lending business, Welcome, by 75% in 2009 compared with 2008.
"We have not taken these decisions lightly and we firmly believe that by cutting costs and preserving capital in the business we can continue to trade profitably, [and] weather the current economic conditions," said chief executive David Postings.
Source : BBC
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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