City Link collapse: 2,000 employees to be made redundant on New Year's Eve

The staff will be made redundant days after discovering that their company went into administration on Christmas Day

A van sits idle at a City Link depot in south London on December 27, 2014. British parcel delivery company City Link has gone into administration and temporarily suspended all operations (AFP/Getty)

More than 2,000 City Link staff are set to be made redundant on New Year’s Eve, according the RMT union, capping a miserable festive period for the business’s workers.

The parcel delivery company announced that it was going into administration on Christmas Day, causing uncertainty and anger among the Coventry-based firm’s 2,727 employees, when many were on holiday with their families.

Staff had been left in the dark until Christmas to find out that their employer had collapsed, despite union claims that bosses had been working with insolvency advisors since November.

Talks between union officials and the administrators, Ernst & Young (EY), took place on Saturday afternoon to discuss City Link’s future.

Mick Cash, the general secretary of the RMT union, called the company’s downfall: “A despicable and callous ‎manipulation of thousands of workers and their livelihoods over Christmas as the venture capitalists cut and run leaving a trail of chaos and misery in their wake.”

He claimed that the business has been subjected to a “truly horrific catalogue of mismanagement” and staff had been “starved of basic information”.

EY said that it anticipated “substantial redundancies” as no buyer has been identified for the business.

The RMT union was told from New Year’s Eve a skeleton staff will be retained to wind down the company.

Mr Cash has demanded an immediate meeting with Vince Cable, the Business Secretary, to arrange a plan to salvage the company.

Mr Cable had offered to meet RMT representatives in the New Year, but Mr Cash said this was too late and added "the business will have been smashed to pieces by then".

A City Link administrator, Hunter Kelly, explained how the company would go forward over the coming days: “We have temporarily suspended operations at all transport hubs and depots until Monday 29 December 2014, when we intend to reopen depots to the public to enable customers and intended recipients to collect their parcels.

“We will also provide support to employees relating to potential redundancies. We are now beginning the process of realising the company’s assets.”

City Link was founded in 1969 and experienced rapid expansion in the mid-2000s, when it bought rival firm Target. The merger proved problematic and by 2011 the business was struggling and making a loss.

In April 2013 it was sold to restructuring experts Better Capital, which invested £40m, but this was not enough to reverse the company’s fortunes.