628 jobs go at Phones 4u HQ but Vodafone saves 800 in 140-store deal

MORE than 600 job losses have been announced at the Staffordshire head office of collapsed mobile phone retailer Phones 4u.

Administrators said the 628 redundancies at the Newcastle-under-Lyme offices had been necessary to strip out costs and make the business look more attractive to potential buyers.

However, there was more positive news for some of the thousands of people employed in the company’s store network after the administrators said they had secured a deal with Vodafone to take over 140 of the Phones 4u stores, preserving 887 jobs.

They have not revealed the location of the 140 stores.

Earlier in the week Dixons Carphone had agreed to offer jobs to the 800 people who had worked in Phones 4u concessions in its stores.

However, the fate of more than 3,000 workers employed at the Phones 4u store network has yet to be decided.

The company was forced into administration earlier this week after service providers EE and Vodafone said they would not be renewing service agreements with the retailer.

Administrators from PwC have been holding talking with interested parties but have yet to secure a buyer for the whole of the business.

In a statement they said: “Following discussions with parties expressing an interest in the Phones 4u business, the administrators have made the difficult but necessary decision to undertake a restructuring exercise at the company’s head office.

“This restructuring reflects the nature of the expressions of interest in the business, and therefore the need to cut costs in the business.  Unfortunately this has led to 628 redundancies, with more than 400 employees being retained to continue to support and assist the administrators in their duties.”

The administrators said they had asked the thousands of store workers to remain at home until negotiations were resolved one way or the other.

Rob Hunt, joint administrator and PwC partner said: “It is with great sadness and regret that we have today made the difficult decision to make 628 head office and telesales staff redundant.  Our thoughts are with those employees at this difficult time.  We will make every effort to help the affected staff, working with the Phones 4u HR team over the coming days to support employees.”

He said the terms of the deal with Vodafone would remain confidential, however, the move will see the 140 stores re-branded as Vodafone over the coming weeks.

The deal is understood to have been agreed between the parties but remains subject to the courts approving the release of the fixed charge security held on behalf of the secured creditors.  The administrators said they would be making an application to the court on Monday for the release of the fixed charge security that will enable the sale to be completed.   

“We have worked rapidly over the course of the week following our appointment to explore interest in the Phones 4u business and we are very pleased to secure a future for a significant number of stores and continued employment for 887 of the Phones 4u people,” added Hunt.

“We wish the transferring employees all the best with their new employer and would like to thank all the Phones 4u staff for their support since our appointment as administrators.

“While this deal remains subject to the approval of the UK courts, we are confident that this represents the best available transaction for the company’s creditors.”