THG cuts 500 staff as shares plummet with a £133 million loss
THG, the owner of Myprotein, has slashed its workforce by 500 employees since the beginning of this year after reporting losses.
The company said it now employed 2,500 people compared to early 2022.
This move is part of a cost-cutting initiative involving investments in automation.
In addition to the staffing changes, THG reported a significant increase in pre-tax losses.
It soared from £108 million to £133 million in the six months ending in June.
During this period, the company’s revenue saw a decline of 9.3 percent, partially due to THG divesting certain segments of its business.
It led to a 17 percent plunge in its shares.
Nonetheless, THG’s CEO, Matthew Moulding, called the results as “strong.”
He highlighted a spike in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), a profitability metric that excludes various operating expenses.
Moulding said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months.
“Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit.
“This is reflected in the strong first half results we’ve posted today, across adjusted EBITDA and cash.”
THG remains committed to serving its customer base, it aims to reduce the sale of lower-margin beauty products.
It’ll result in a more than 10 percent decline in revenue from its beauty division.
It encompasses online retailers Lookfantastic, Cult Beauty, and Dermstore.
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This shift in product focus has contributed to a decrease in margin within the beauty division, from 2.9 to 2 percent.
It led to a reduction of over 40 percent in adjusted EBITDA for this segment.
Moulding said: “The beauty division was held back in the first half by short-term global de-stocking impacting manufacturing volumes.”
“The situation has now started to reverse with the beauty division returning to growth since August, at the same time margin progression continues.”
Despite these, THG is maintaining its adjusted EBITDA guidance for the year.