West Midlands bears the brunt of City Link redundancies

THE West Midlands has borne the brunt of the 2,356 job losses announced by administrators of collapsed parcel delivery group City Link.

In total, 524 redundancies have been announced by EY – the figure is the highest among the UK regions because of the group’s head office being based in Coventry.

However, a further 214 redundancies have been announced in the North West, with 66 being lost from Yorkshire and Humberside. (For full details see below.)

The national figure means just 371 staff have been retained across the business to help administrators with the winding down of the company.

Announcing the redundancies, administrators confirmed that an eleventh hour bid had been made for the company by an unnamed consortium but this had been dismissed because it “significantly undervalued” the business.

“An offer was made by a consortium which offered no money up front and significantly undervalued the assets to be acquired. The administrators proposed an alternative structure that would be acceptable and common in these situations. The consortium, despite attempts to make them reconsider, declined to amend their original offer,” said the EY administrators in a statement.

The City Link business, which had been owned by venture capitalist Jon Moulton’s Better Capital, lapsed into administration on Christmas Eve. Better Capital issued an apology to workers for the story being leaked to the media ahead of official confirmation.

Hunter Kelly, one of the joint administrators of City Link Ltd, said: “It is with regret that we have to announce substantial redundancies at City Link. The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link entered administration following an unsuccessful sale process.
 
“At meetings across City Link’s UK sites on Monday December 29, 2014 and Tuesday December 30, 2014, employees were informed that there would be substantial redundancies as no new business was being taken on. Many of these employees were sent home, and informed that they would shortly receive formal correspondence to confirm their work status.”
 
The joint administrators have written letters to all employees affected by redundancy. The correspondence officially confirms redundancy and offers guidance for the claims procedure for redundancy and notice pay.
 
Employees affected by redundancy are being offered advice and support in making claims for redundancy and notice pay.

Mick Cash, General Secretary of the RMT union, said: “The confirmation from the administrators that they have just sacked 2,400 staff and are pulling the plug on any efforts to save City Link is a disgraceful and cynical betrayal that will wreck the lives of our members, many of whom are owed thousands of pounds.

“RMT does not believe that those pulling the strings had any interest in saving this business and were happy to cut and run leaving a trail of human misery in their wake. The City Link collapse has blown the lid off the cosy relationship ‎between bandit capitalism and the political elite.”

The union had urged Business Secretary Vince Cable to intervene in the administration and effectively nationalise the City Link operation. However, he declined to do so and said help to former workers would be available through support bodies such as JobCentrePlus.