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City Link Sheds More Jobs as Delivery Depots Close

Written by: Keith Tully

Reviewed: Wednesday 7th January, 2015

The parcel delivery company City Link is to shed a further 230 jobs having entered administration on Christmas Eve and let go more than 2,000 employees based in various parts of the UK.admin

Assets belonging to the business are now being sold off by administrators who recently took on the task of informing hundreds of City Link staff that they were being made redundant over the festive period.

The latest job cuts come as administrators move to close City Link depots nationwide, of which a total of 51 will be permanently closed before January 15th.

The 230 new redundancies add to the 2,356 that were announced just a few days after City Link’s administration was made public late last month.

“It is with great regret that we announce further redundancies at City Link,” said Hunter Kelly, joint administrator. “It is no longer viable to continue operating these depots,” he said.

A small number of back office staff are to be retained as City Link employees, including 141 at its head office in Coventry, while the business is wound down in the coming days and weeks. There are believed to be roughly 20,000 parcels still within the company’s delivery network, with plans in place to see all packages delivered through alternative service providers.

There had been hope that a consortium might save City Link from disaster and rescue it from administration but the last-minute offer made by unnamed parties was rejected and large-scale redundancies were announced soon after.

Administrators explained that the buyer “offered no money upfront and significantly undervalued the assets to be acquired”.

The focus for administrators now is on successfully managing the process of selling off all remaining City Link assets, with deals to that end already being done.

DX, which was until recently a City Link rival, agreed this week to pay just over £1 million for various items of equipment and intellectual properties belonging to the collapsed delivery company.

“This transaction represents our first step in realising the value of City Link’s assets,” explained Hunter Kelly. “We will continue this process over the coming weeks, alongside conducting an orderly wind down of the company’s operations.”

It is understood that the collapse of City Link led not just to more than 2,500 direct redundancies but also to significant lost revenues for around 1,000 self-employed delivery drivers and third-party workers who operated in conjunction with the company.

“It is very sad that City Link has been unable to continue as a going concern, particularly for its employees and contractors,” said DX chief executive Petar Cvetkovic.   

“We are also doing all we can to provide opportunities for former City Link employees and contractors, and to offer solutions to customers who may need a new carrier,” he added.

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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