Car dealership Lookers today said it will cut roughly 1,500 jobs and close 12 showrooms as it reels from the impact of Covid-19.
The struggling motoring chain, which employs roughly 8,100 people, said it will start consultations on the cuts across the business.
Lookers also said it had identified a further 12 showrooms for closure, merging or refranchising. These come on top of 15 site closures previously announced, and will reduce its portfolio to 136 dealerships.
The firm said the measures would cut costs by roughly £50m per year. Shares in Lookers jumped more than 11 per cent following the announcement.
Lookers this week reopened its dealerships in line with government guidance after two months of closures due to the coronavirus lockdown.
However, the firm has been hit by plunging car sales and said the cuts were necessary to ensure the long-term viability of the business.
Lookers has also been left reeling from an internal investigation into potential fraud in one of its divisions.
The firm said it would take action after initial findings from Grant Thornton’s probe found areas where financial controls needed tightening.
Lookers reported net debt of £57m at the end of May and said it was in talks with banks over amendments to its £250m revolving credit facility, which expires in March 2022.
Chief executive Mark Raban said that while the company was pleased to have reopened its dealerships, it was still facing an “uncertain economic and industry environment”.
“Against this backdrop we have taken the decision to restructure the size of the group’s dealership estate to position the business for a sustainable future, which regrettably means redundancy consultation with a number of our colleagues,” he said.
“This has been a very difficult decision and we will be supporting our people as much as possible throughout the process.”