Up to 350 jobs are set to go at North East motor retailer Vertu as a result of technological improvements to improve efficiency in the business.
The Gateshead based business, which has a network of 133 sales and after-sales outlets across the 海角视频 as well as more than 300 people at its Team Valley contact centre, reopened all its dealerships last month, having closed them at the start of lockdown.
During lockdown CEO Robert Forrester said the firm’s inhouse software development team continued to work and innovate, working to embrace the trend of a move towards online retailing.
As a result, Vertu has announced that it will cut group headcount by 6%, which equates to around 345 jobs. It is not known how manty roles will be affected at its head office or within the North East.
The programme is expected to be concluded at the end of July and, together with other identified cost savings, is expected to deliver annual cost savings of £10m.
The job reduction has come as the group reported a stronger than expected performance in June, reporting an adjusted profit before tax of £9m in June, having incurred an adjusted loss before tax of £14.2m in the March to May period as a result of the Covid-19 closures.
The firm said the result for the month was despite not earning significant quarterly manufacturer volume bonuses due to the lockdown.
It said the impact was partially offset by the continued positive impact of Government support packages, and that the June performance was ahead of last year’s June figures and above the group’s original business plan of £8.6m.
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Figures in Vertu’s trading statement show that it is outperforming the industry on a number of measures, including the sale of new cars and commercial vehicles. It said that “pent-up demand is evident with consumers having increased savings ratios during the lockdown”.
But it has seen a 53% drop in its fleet sales division, highlighting some of the challenges facing the automotive sector.
The group’s in-house software development team has rolled out the tech it worked on during lokdown, with improvements including better buy online and ‘reserve it now’ functionality, the introduction of a fully ‘paperless’ vehicle sales process, including the ability for customers to ‘sign’ via SMS messaging and improved efficiency of administration processes.
Mr Forrester said: “June trading was stronger than we had expected. I would like to thank the team for their hard work and enthusiasm as well as for their efforts to ensure the dealership environments remain safe for customers and colleagues.
“The group’s cash position was much stronger than we could have hoped, despite the fact the board has made the decision to ensure all suppliers are paid in full, on time, illustrating the discipline within the business.
“The Covid crisis has driven an acceleration of technology uptake and we are embracing this trend to futureproof the business. As automation progresses, we have made the difficult decision to reduce group headcount by 6%, which contributes to £10m of on-going annualised cost savings being identified.”