2,356 jobs axed at City Link after rejection of rescue offer
- Credit: PA
More than 2,350 workers at collapsed parcels firm City Link have been made redundant, its administrators confirmed tonight, after talks with a potential buyer failed to produce an acceptable offer.
Ernsty & Young (EY) said an offer had been received from a consotium, but “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,” EY added. “The consortium, despite attempts to make them reconsider, declined to amend their original offer.”
EY said that a total of 2,356 redundancies had been made across City Link’s UK sites.
A further 371 people have been retained to deal with the parcels that remain within the City Link network, and to assist the administrators in realising the company’s assets and winding down its operations.
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Hunter Kelly, joint administrator of City Link, said: “It is with regret that we have to announce substantial redundancies at City Link Limited, which ceased accepting new parcels on 24 December 2014.
“The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link Limited entered administration following an unsuccessful sale process.
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“At meetings across City Link Limited’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 administrators say they have written letters to all employees affected by redundancy, with the correspondence officially confirming redundancy and offering guidance for the claims procedure for redundancy and notice pay.
“Employees affected by redundancy will be offered appropriate advice and support in making claims for redundancy and notice pay,” EY added. “The administrators have also provided employees with contact details for enquiries regarding redundancy and claims for redundancy.”
The redundancies include 33 at City Link dept in Chelmsford, where nine staff have been retained for the time being, and 38 at its Norwich depot, where five workers have been retained.
A total of 279 jobs have gone at City Link’s headquarters in Coventry, where nine people have also been retained to work with the administrators.