In a bid to save £40 million in annual costs, the UK sub prime lender Cattles has announced that it will cut at least 1,000 jobs – 20% of its workforce.
The doorstop lender that targets low income and credit-poor borrowers also revealed that it would be restricting the amount of new business it manages by 75%.
A company call centre in Hull will be closed, resulting in 400 employees losing their jobs, while the rest of the redundancies will be made across its UK branch network, including from call centres in Nottingham.
Cattles chief executive David Postings said that the decision was not taken lightly, and that it was vital in order to “strengthen the business in this uncertain environment.”
The company has been struggling since the onset of the credit crunch as it relies heavily on wholesale markets for lending. The majority of Cattles loans are repaid monthly by direct debit, whilst agents also visit borrowers’ homes weekly to collect interest payments.
Attempting to diversify into retail deposits, Cattles had applied to the FSA for a retail banking license but recently admitted that new, tougher qualifying criteria was delaying the regulator’s decision. This sparked rumours that the application could possibly be rejected.
Shares in Cattles dropped by 6% yesterday morning, the company has seen a 90% decrease in their value since last January.
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