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Purplebricks cuts jobs and ups cost savings target in turnaround plan

Purple Bricks

Purplebricks puts itself up for sale and makes new staff cuts

Digital estate firm Purplebricks is cutting jobs across the board as it unveiled plans to further reduce costs to try turn a profit.

The firm claimed to have improved its yearly cost reduction target, from £13 million to £17 million.

According to the statement, initial savings have been made by lowering the number of employees across the company, closing offices, and slashing market spending.

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Purplebricks has a redundancy programme in place and will further reduce its staffing levels to meet the new savings goal.

The company declined to disclose on the number of positions it has already cut or planned to remove.

The platform has also shut down an office in London and another local office as part of turnaround plans.

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The cuts will reduce big overhead expenditure and leave the company “leaner and healthier, ready for growth”, it said.

It comes as the firm informed adjusted operating losses of £8.4 million in the six months to October 31, increasing tenfold from the £800,000 in losses reported this time last year.

Revenues also fell by 16 percent, from £41.3 million last year to £34.5 million this year.

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Purplebricks’ chief executive Helena Marston told investors its plan was being delivered “at pace” and she expects to see the benefits begin to show in the second half of the financial year.

She said: “The turnaround plan is working and is being delivered at pace, with the financial benefits starting to come through in the second half of the year.

“We have taken further steps to reduce our cost base, from an initial £13 million of annualised savings to £17 million, while also investing in our strategic priorities and increasing the efficiency of our field.

“We are ever mindful of the current economic environment. Our relevant, low-cost proposition, effectively communicated via our new marketing campaign, supports our customers and is especially attractive in these economically challenging times.”

The platform, which ties purchasers, sellers and property owners with local property experts, also said it is launching a new mortgage product ahead of schedule.

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It will offer improved assistance for people who are on the lookout for a loan or to re-mortgage, which means it can sell other financial products, including insurance, to customers and bump up the firm’s revenue per mortgage by threefold, it said.

Besides, the firm emphasised that it is in a good position to aid people looking for low-cost estate agents amidst the cost of living crisis.

It stood by its full-year earnings expectations, which evaluates adjusted operating losses of £8.8 million, but could drop as low as £11.3 million or narrow to £4 million according to the consensus.

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However, one of Purplebricks’ shareholders Lecram Holdings, which has a 5.16 percent stake in the company, criticised the lack of financial improvement and urged it to make changes to protect the value of its shares.

The group is campaigning for the removal of Purplebricks’ chairman, Paul Pinder, and the appointment of Rightmove and Countrywide founder Harry Hill as a director.

Source: Express & Star

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