Cattles, the troubled doorstep lender, is poised to cut a further 500 jobs after the closure of a number of its Welcome Financial branches.
The group, which has already shed 1,000 jobs, plans to close 30 of its 180 Welcome units and cut back its sales and support teams.
The company, which is saddled with £2.4 billion of debts and has been struggling to stay afloat, said that more than 500 workers have been given notice today that they are at risk of redundancy in the division, the group’s main business accounting for 95 per cent of its turnover .
In a statement, Cattles said: “As part of an ongoing comprehensive review of the Welcome business, Cattles proposes the closure of 30 branches where leases have expired or are due to expire and a reduction in the number of its sales and support teams. Cattles’ new management team believes the proposed measures better align the network with reduced levels of lending and will deliver efficiencies.”
A consultation process with staff had begun, it said.
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Cattles added that it remained in “constructive discussions with key financial creditors to obtain a standstill agreement”.
Cattles, based in Batley, Yorkshire, specialises in lending to low-income customers, some of whom have chequered credit histories.
The group has been in crisis since February, when auditors at PricewaterhouseCoopers (PwC) questioned the level of impairment charges it was taking to cover a surge in problem loans.
Six senior Cattles directors have since left after an investigation into a “breakdown” in internal controls and the Accountancy and Actuarial Discipline Board (AADB), part of the Financial Reporting Council, has launched an investigation into PwC and its oversight of the troubled lender.
Cattles shares have been suspended since April and its 2008 accounts have not been filed.
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The group has a standstill agreement from its banks for about £1.3 billion in debt but is now seeking an arrangement with bondholders.
Last month Cattles sold its invoice finance division to AnaCap Financial Partners, a private equity firm, netting £70 million.
Some of the money raised will be put into a special retention account to cover final adjustments to AnaCap due on completion of the deal and for potential pension fund payments but the group expects to secure £65.5 million to reduce its debts.
Aside from its Welcome Financial division, which has units across the country, Cattles retains Lewis Group, a debt collection and investigation service.
Welcome Financial also operates the Shopacheck brand.