Loans firm Cattles planning to axe 1,000 staff

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The Independent Online

Consumer lender Cattles said today that it was considering plans to cut 1,000 jobs, including through the closure of an office in Hull.

Cattles, which employs around 5,000 people, said the reduction was needed as it expected its Welcome Finance personal lending arm to cut new business volumes by around 75 per cent this year.

The company said it had begun consultation with staff about the reduction of 1,000 jobs, including the loss of 400 positions through the closure of the back office operation at Hull.

Cattles, which is also suspending dividend payments to shareholders, will look for a range of other cost-saving measures in order to conserve cash in the coming months.

It is currently in talks with its banks about refinancing facilities which are due for repayment in July.

Cattles chief executive David Postings said the measures, which will deliver savings of around £40m, were designed to strengthen the business in the current uncertain funding environment.

He added: "We have not taken these decisions lightly and we firmly believe that, by cutting costs and preserving capital in the business, we can continue to trade profitably, weather the current economic conditions, and continue to serve over 850,000 customers in this important part of the market."

Cattles, which is a specialist lender in the sub-prime market, said credit quality remained within "reasonable tolerances" and had no bearing on its announcement today.

The company also runs debt recovery firm Lewis and a business providing working capital finance to small and medium-sized businesses through six regional offices across the UK.

Cattles said it would continue to write new business in 2009, but said it expected volumes in Welcome Finance to be down by some 75 per cent on 2008, which itself saw a reduction from 2007.

Staff at the office in Anlaby, on the outskirts of Hull, said today that they could not comment on the job cuts.

A number of employees gathered in a smoking shelter at the rear of the office but said they were not allowed to talk about the announcement.

A sign on a grassed area in front of the flat-roofed brick building announced offices for sale.