Made.com to shed workforce amid plans for company sale

Made.com could reportedly cut over a third of its headcount alongside plans to explore a potential sale of the group, as part of a board decision to conduct a formal review of the business amid “continued uncertainty” and challenging trade.

In order to reduce costs amid the current trading environment, the group’s board confirmed it plans to implement additional cost reductions that include a strategic headcount review, set to begin within the next few weeks.

The Financial Times reported that around 35% of the group’s workforce could potentially be axed, with consultation processes reportedly under way already, and those affected to leave by the end of October.

In an email to staff, sent last week and seen by the Financial Times, chief executive Nicola Thompson said the business needed to make “some very difficult but necessary changes” amid “unprecedented levels of market disruption and prolonged market volatility”.

Meanwhile, the group confirmed it has appointed PwC as a financial adviser to help explore a potential sale of the group, adding that no discussions with potential buyers had begun. 

In its latest update, the group said: “While the group has had a number of strategic discussions with interested parties, the group is not in receipt of any approaches, nor in discussions with any potential offeror, at the time of this announcement. 

“As described above, the board emphasises that a sale of the group is only one of a number of strategic options to be considered under the Strategic Review. Another option under consideration is to seek a strategic investment in the group.” 

It comes as the group has faced multiple trading challenges recently, the first headwind being the decline in consumer spending amid increased inflation, as well as a steep decline in consumer confidence.

During the first half of the year, the group said its core markets experienced challenging macroeconomic conditions, including economic slowdowns and rising inflation of commodity and energy prices, spurred by Russia’s invasion of Ukraine.

Again, it noted these events have caused a “sharp” decline in consumer confidence and contributed to a “significant withdrawal” of consumer discretionary spending.

It added that the ongoing adverse market conditions have also made it challenging for the group to acquire new customers, whilst the group has also faced higher customer acquisition costs.

Meanwhile, the group has also faced a challenge with instability and increased costs with its supply chains. It noted that recent macroeconomic conditions and geopolitical events again impacted global supply chains, leading to industry wide freight cost increases. 

In the second half of 2021, significant increases in market spot rates for freight contributed to a rise in freight costs from £8.2m in 2020 to £45.3m in 2021, which the group has not been able to fully pass on to its customers during a tightening consumer macroeconomic environment, resulting in depressed margins.