25 December 2014
Last updated at 18:11
UK parcel delivery company City Link, which employs 2,727 people, has gone into administration.
The company, owned by investment firm Better Capital, called in administrators on Christmas Eve after years of “substantial losses”.
It stopped accepting parcels from customers at its head office and transport hub in Coventry, its three other transport hubs and 53 UK depots.
Administrators warned of “substantial redundancies” over the coming days.
This is because no buyer has been found to save the company.
Operations will be suspended at all the company’s depots until Monday when customers and recipients will be able to collect their parcels.
Hunter Kelly, joint administrator to City Link with Ernst Young, said: “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.
“Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.
“We will provide support to employees relating to potential redundancies. We are now beginning the process of realising the company’s assets.”
Mick Cash, general secretary of the RMT union, said: “This is the bitterest blow any group of workers could receive on Christmas Day and it is absolutely shocking that the company have sprung this announcement once all the Christmas deliveries have been completed.
“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.”