Administrator EY warns of substantial job losses at City Link
ADMINISTRATORS acting for collapsed parcel delivery group City Link have warned of substantial job losses among the company’s 2,727 workforce after admitting that no buyer can be found for the business.
In a statement, EY – which was appointed administrator on Christmas Eve – said: “At this stage, no redundancies have been made amongst City Link’s employees. However, it is anticipated that there will be substantial redundancies over the coming days, as no buyer has been identified following a sale process for the company and its business.
“Employees that are ultimately affected by redundancy will be offered appropriate advice and support in making claims for redundancy and notice pay. Employees that are not immediately affected by redundancies will be retained to help return parcels to customers at City Link’s locations, as well as assist in realising the company’s assets and winding down its operations.”
It said City Link (Properties) No.1 Ltd managed and coordinated payments on selected property leases on behalf of City Link Ltd but it has no employees. The administrators have begun winding down City Link (Properties) No.1.
Hunter Kelly, Joint Administrator to City Link along with Charles King and Tom Lukic, said: “City Link Limited has incurred substantial losses over several years. These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the Company in reducing its cost base.
“The strain of these losses became too great and all but used up Better Capital’s £40m investment, which was made in 2013 and intended to help to turn around the company. Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.”
The administrators said it expected depots would be opened today (Monday) to allow people to collect their undelivered parcels but all transport operations remained suspended.
They said they were also hoping to provide workers with more information. In the meantime, they said they were beginning the process of realising the company’s assets.
