Saturday 27 December 2014 3:45 am

City Link workers demand urgent talks as 1,000 more jobs could be at risk

Workers at City Link, the parcel delivery company which collapsed into administration on Christmas Eve, have demanded talks with administrators, as it emerged 1,000 more jobs than originally thought may be at risk.

The BBC reported that leaders at the Rail, Maritime and Transport (RMT) union has written an open letter to business minister Vince Cable, saying it wants to establish the "real motives" behind the decision to call in administrators.

It also asks the government to look into a restructuring "just prior to the collapse into administration which may have moved the valuable property assets out into a separate company".

Although the company went into administration on 24 December, the media was only told on Christmas day. The union has criticised its "dreadful timing", pointing out that some workers did not find out until they saw it on the news on Christmas day.

It has also emerged that on top of the 2,700-strong permanent workforce at risk, another 1,000 contractors may also lose their jobs.

City Link owner Better Capital, which bought the firm in 2013, had invested £40m in trying to save the company, administrator E&Y said.

The strain of these losses became too great and all but used up Better Capital's £40m investment…. Despite the best efforts to save City Link, including marketing the company for sale, it could not continue to operate as a going concern.

Roger Sumner-Rivers, founder of courier ParcelHero, suggested the administration will have wide-ranging implications on the rest of the industry.

Large retailers like John Lewis and Amazon have to now quickly adjust their operations to divert shipments to other suppliers. However it is small firms – who will often not have established relationships with multiple couriers, and rely on City Link for all their deliveries – that are in the biggest quandary. They will have to find a new supplier and set up account facilities before 2 January or face not being able to deliver orders to their customers.