Egg to axe up to 50 jobs

Still on target to break even in Q4

By Tim Richardson, 17th October 2001

Magic Quadrant for Enterprise Backup/Recovery

Egg is to shed between 30 and 50 jobs as part of a restructuring exercise, the company confirmed today.

The jobs cuts - modest in nature compared to the 2,000 or so currently employed by the online bank - will be finalised by the end of the month.

The job losses are part of a "comprehensive organisational review" currently underway which the company said is likely to yield an exceptional restructuring charge of around £2 million in Q4 and annual savings of more than £4 million after that.

News of the cuts comes as Egg confirmed it is within weeks of breaking even.

Paul Gratton, CEO of Egg plc, said: "Our core UK business remains on-track to break-even at some point during the fourth quarter."

Which is exactly what Egg has been saying since the beginning of the year at least.

Mr Gratton continued: "With revenues growing strongly quarter on quarter and costs remaining flat we are moving confidently towards profitability."

Picking out the key financial highlights for the three months to September the online bank saw operating income double to £127 million, up from £61.2 million in the same quarter last year.

At the same time pre-tax losses fell by 29 per cent from £25.5 million in Q2 to £18.4 million in Q3.

It also managed to attract some 83,000 new customers during the last quarter giving it a total customer base of some 1.8 million. ®