City Link: further 230 redundancies add to ‘tide of human misery’

http://www.theguardian.com/business/2015/jan/07/city-link-redundancies-depots-close

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A further 230 workers at City Link will lose their jobs as the administrator for the collapsed parcel carrier closes its remaining 51 depots by the end of next week.

The redundancies will leave 141 employees working for the company, which employed more than 2,700 people before it fell into administration on Christmas Eve. Nine depots will close on Wednesday and the rest will shut by 15 January, administrators Ernst & Young (EY) said.

Many of City Link’s workers learned of the company’s fate on Christmas Day, and 2,356 were made redundant on New Year’s Eve. The RMT union said the remaining employees would lose their jobs soon.

Mick Cash, RMT general secretary, said: “Today the remaining City Link staff who escaped the sack on New Year’s Eve will be told that they are out of a job as well, as the tide of human misery unleashed by the collapse of the company over Christmas continues to swell.”

City Link has 20,000 undelivered parcels that will be sent to its Coventry base for collection by customers or delivery by another firm.

The loss-making company was owned by Better Capital, a private-equity firm led by Jon Moulton. The buyout veteran has apologised for the pain caused to employees and the company’s 1,000 self-employed drivers and contractors.

The RMT said it believed City Link was owed £30m by customers such as John Lewis and Mothercare, and that this money would go to Better Capital. Moulton’s firm wrote down its £40m investment, in the form of secured loans, by half in September.

Cash said: “With the administrators now conducting a fire sale of the City Link assets, it is simply outrageous that the capitalists from Better Capital, who drove the company over the cliff, have ringfenced their investment as secured loans and will get first call on any cash raised – while our members will be forced to wait months and can only expect a pittance.”

EY began selling off City Link’s assets this week. Rival delivery firm DX paid just over £1m for some of the company’s equipment and intellectual property.

Hunter Kelly, joint administrator for EY, said: “It is with regret that we announce further redundancies at City Link Limited, which will take effect over the coming days as the company’s remaining UK depot operations close. Having returned a large volume of parcels to City Link Limited’s customers and recipients over recent days, it is no longer viable to continue operating these depots and a phased plan to close them has begun.”