7:07 am, December 15, 2023
Lookers staff claim ‘Christmas has been cancelled’ at the car dealer group as more job cuts are announced and parties vetoed.
Sources say servicing teams at the group’s 160 dealerships have now been told they are facing redundancy as part of wide-ranging cuts.
Another source said the staff had been told the company’s Christmas parties have been cancelled, some with just a few days’ notice.
On Tuesday, Car Dealer exclusively revealed that 650 of the group’s sales staff, including business managers, were at risk of losing their jobs.
The cuts equate to 10% of Lookers’ total workforce and come on top of the 200 employees at head office who were told they were facing the axe two weeks ago.
Up to 100 job losses are also on the cards at Charles Hurst, Lookers’ franchised dealership subsidiary in Northern Ireland.
One source told Car Dealer: ‘Further to your articles this week, it is not just sales that are facing redundancy – this extends to service teams as well.
‘News was delivered to us Monday afternoon and confirmed the following day that the first consultancy meetings would take place today (Thursday).
‘Obviously at this time of year it has hit every site incredibly hard and morale across the board has hit rock bottom.’
The employee said ‘25% of the service engineers were facing redundancy’ at the site he worked at.
Another employee added: ‘The losses are far reaching and affecting every department in the business with some departments being removed in their entirety.
‘The company Christmas parties have also been cancelled with a few days’ notice, but this was the first mention of any cost management.’
The disgruntled employee questioned why redundancies had been the first option when it appeared ‘no other cost cutting’ had been considered.
‘What efforts exactly have been made to reduce costs to avoid redundancies?’ said the current employee, who wished to remain anonymous.
‘There have been no such communications and in fact projects to reduce costs have been ignored.
‘There is a tendency to blame a downturn, when in fact the current sales levels are as expected for the time of year.
‘Second hand car valuations have dropped but these are only a return to what are expected levels. All of this was foreseeable in advance of the purchase.’
Lookers confirmed to Car Dealer that service department staff were also affected by the redundancy consultations. It did not comment on the cancelled Christmas parties.
Several dealer groups have reached out to affected Lookers staff with job postings. On an earlier LinkedIn update this week, Vines, Paul Rigby Volvo, Pendragon, Peter Vardy, Trust Ford, Parks and others all offered support to those impacted and posted links to jobs at their businesses.
Industry charity Ben also said Lookers staff can call 08081 311 333 for free and confidential advice.
Debt pile
Lookers was taken private and off the London Stock Exchange at the beginning of October by Global Auto Holdings – the bidding vehicle of Canadian firm Alpha Auto Group – in a £504.2m deal.
The 130p per share offer was funded by a consortium of three Canadian banks and it is believed the loan will need to be refinanced in 12 months’ time.
Lookers’ annual results for 2022 showed an increase in revenue last year to £4.3bn with the firm making pre tax profit of £82.7m.
At the time of the offer the group said it had a ‘robust balance sheet’ with net cash of £66.5m and a property portfolio worth £290.5m.
However, interest payments on the loan are expected to be crippling and could wipe out a large chunk of profits this year at the same time as the market has nose dived.
‘With a huge debt to service and the need to refinance it within a year, the clock is ticking at Lookers,’ said a city source.
‘Those interest payments will be huge and will wipe out a large chunk of profit for 2023 and 2024, so it’s no surprise these job cuts have been announced.
‘The timing is very unfortunate, though, and will make for an upsetting Christmas for a lot of families impacted by it.’
Alpha Auto Group chairman Kuldeep Billan is also looking for a new CEO for Lookers after Mark Raban announced to staff he was stepping down at the end of the month.
A likely candidate might have been former Marshall Motor Group boss Daksh Gupta, but he has accepted a role outside of the industry as CEO of building merchants Huws Gray.
This is the second time in just over three years that Lookers has slashed staff numbers. In June 2020, at the height of the pandemic, it cut 1,500 jobs – 20% of its then workforce – and closed 12 dealerships.
If you have news you’d like to share anonymously with Car Dealer, contact the team via email. Your comments will be treated in the strictest of confidence.
