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City Link announces administration on Christmas Day

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Express parcel delivery firm City Link announced on Christmas Day that it had gone into administration, leaving workers in shock and concerned about their futures.

The Coventry-based firm, which employs 2,727 staff, made the move on Christmas Eve, blaming "substantial" losses – with administrators also warning of significant redundancies in the coming days.

Mick Cash, RMT union general secretary, said the timing of the announcement was "disgraceful".

He called the decision to go into administrations was the "bitterest blow any group of workers could receive on Christmas Day".

He said: "Th RMT will do everything within its power to mobilise a political and industrial fight to save the thousands of jobs that have been put at risk as a result of this shock announcement.

"The way it's happened... that on Christmas Day they've done this to our members is disgraceful."

The RMT told its members on Christmas Eve that it understood that wages owed up to December 31 would be paid, but further payments could not be guaranteed.

City Link, owned by investment firm Better Capital, called in administrators Ernst & Young after failing to sell the firm.

Hunter Kelly, of Ernst & Young, told the BBC: "City Link Limited has incurred substantial losses over several years.

"These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base.

"The strain of these losses became too great and all but used up Better Capital's £40m investment, which was made in 2013 and intended to help to turn around the company."

Founded in 1969, City Link said on its website it had annual revenues of approximately £300m, a fleet of 1,700 vehicles and delivered 60 million items across the UK and worldwide each year.

Only last year, the delivery firm launched a recruitment drive for 80 new apprentices. 

John Lewis, whose flagship store at Leicester's Highcross shopping centre begins its sale tomorrow, is understood to have been a major customer.

As well as employees, many delivery drivers who work as sub-contractors, will be hit by the administration announcement. 

City Link announces  administration on Christmas Day


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