Entain, the parent company of Ladbrokes, Coral, and BetMGM, is set to reduce its customer care workforce by approximately 400 positions. This decision comes as the gambling firm grapples with increased taxation in the UK and the looming threat of further duty hikes on gaming machines.
The company has initiated a consultation process that could impact around 20% of its 2,000 customer service roles.
Stella David, the Chief Executive of Entain, stated that the proposed adjustments aim to keep the business competitive, financially robust, and well-prepared for future challenges in a tough operational landscape.
“This decision has not been made lightly, and our immediate focus is to support those colleagues who may be affected during this transition,” she remarked.
The anticipated job reductions follow Entain's recent announcement of a £479 million ($644.17 million) underlying operating profit for the first half of the year, which is a 2% decline from the previous year but surpasses investor expectations. The company attributes this performance to cost-saving measures and the surge in activity during the soccer World Cup.
Entain has indicated that the job cuts are partly a response to the increased gambling taxes in the UK. Last November, gaming duties were raised to 40%, while online sports betting levies were set at 25%.
Further tax increases on gaming machines are anticipated in the upcoming October budget.
In a letter dated September 11 to Andy Burnham, which was shared with Reuters, David cautioned that doubling the Machine Games Duty (MGD) from 20% to 40% could impose an additional £100 million ($134.48 million) burden on Entain's UK retail operations.
“A further doubling of the Machine Games Duty would add significant costs to businesses already struggling with substantial tax increases, putting labor-intensive high-street operators at a disadvantage,” David explained.
Entain has warned that such an increase could lead to the closure of 1,470 betting shops and the loss of 15,900 jobs across the UK.
The Social Market Foundation estimates that doubling the MGD could generate an extra £275 million ($369.82 million) to £458 million ($615.93 million) from category B £2-a-spin slot machines, in addition to the £600 million currently being paid.
Globally, Entain employs over 28,000 individuals and is scheduled to transition from the FTSE 100 to the FTSE 250 on September 21.