Funding Circle to cut 120 jobs in £15m cost savings drive
Small business lending platform Funding Circle is set to axe around 120 roles within its workforce as part of a bid to simplify and streamline its UK business, according to a recent filing with the London Stock Exchange (LSE).
Funding Circle to cut 120 jobs
The cuts form part of the company’s business simplification strategy which, first announced in March, seeks to create “a simpler, leaner and better positioned UK focused operation” as part of its “ongoing commitment to profitability”.
As stated in the LSE filing, Funding Circle expects the strategy to deliver annualised run rate cost savings of around £15 million by 2025. With part of this strategy now in motion, Funding Circle anticipates it will incur non-recurring costs of approximately £5 million as a result of its latest action, a cost that it says “will be recognised in 2024”.
In addition to the job cuts, Oliver White, Funding Circle’s CFO of four years, has also announced his intention to step down from his role. He is scheduled to leave the company’s board “at the end of 2024”, and is to be succeeded by Tony Nicol, a former financial controller for IG Group and the company’s current director of finance and investor relations.
Speaking on the latest development, Lisa Jacobs, CEO of Funding Circle, says that although the company is “pleased to report continued momentum on the path we set out in March to become a simpler, profitable business”, the reduction in roles was “not a decision we took lightly”.
Funding Circle adds that its current year-to-date performance remains “in line with expectations” and the firm is “on track to meet full-year guidance”.
In relation to the potential sale of its US division, as mentioned by Jacobs during the company’s March earnings call, the LSE filing states: “Discussions regarding a potential transaction are progressing well and an update on the outcome will be provided in due course.”
“Whilst the US business offers attractive long term growth, it also requires a significant amount of cash and capital to grow the small business administration (SBA) proposition and we don’t believe that this is the best course of action for the group,” Jacobs previously told investors.
