Thursday 12 March 2020 11:43 am

Funding Circle to lay off 125 workers in Amsterdam and Berlin

Funding Circle will lay off 125 workers in Amsterdam and Berlin as British the peer-to-peer lender retreats from Europe to its more profitable home market. 

The lender will maintain a staff of 25 based in London to run its German and Dutch businesses, chief executive Samir Desai told Reuters, with the divisions focusing on partnering with local banks. 

Read more: Funding Circle: Finance chief quits small business lender

News of the layoffs came as Funding Circle reported an £84m loss for 2019, which it said was largely due to problems in the two “developing markets” where it is cutting staff.

The company also booked a £34.3m writedown related to its Dutch and German divisions. 

Shares in the lender, which focuses on financing small businesses, fell as much as 5.62 per cent following the update. 

Funding Circle posted an 18 per cent increase in revenue for 2019, which rose to £167.4m despite what the company called a “challenging economic environment”.

Its UK business, which represents around 65 per cent of total group revenue, reported an operating profit of £3m in the second half of 2019, compared to a loss of £5.4m for the half the year before. 

The lender’s total loans under management hit a record £3.7bn, a 19 per cent year-on-year increase. As of the end of 2019, around 80,000 small firms had accessed funding via the company, Funding Circle said. 

Shares in the lender have crashed as much as 87 per cent since its stock market debut in 2018, and Funding Circle warned last year that an uncertain economic outlook was dampening demand for loans. 

Read more: Funding Circle investors face four month wait to withdraw cash

“The actions we took in 2019, in response to the uncertain economic outlook, reduced growth but improved investor returns and were the right response for the long-term benefit of the company and our customers,” said Desai.

Desai said the business had started 2020 “in a stronger position”, and was targeting to break even on an adjusted EBITDA basis in the second half of the year.