More Gala Bingo clubs closures lead to 300 lost jobs

Written by: Nikola Zugic on 07/07/2009 23:55
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Gala Bingo is the leading land based bingo operator in the UK. However, this didn’t help the group, Gala Coral, avoid closing bingo clubs across the country when the bingo tax rates went up to a whopping 22 percent. It was previously at 15 percent. Ever since the change has been implemented, we’ve seen a couple of bingo closures. But up to now, when the bingo tax rates haven’t been reduced, Gala Bingo continues to close a couple more bingo clubs.

Gala Bingo has to undergo reorganization in their company and this means that they are letting go five more bingo clubs in the country. What this means? There will be 300 more jobs to be lost. The private-equity backed owner of these Gala Bingo clubs, casino operations, as well as the Coral bookmakers has target more than one hundred eighty largely administrative job cuts. These jobs included those of the finance and marketing staff. This is a result of making the support functions run central rather than by divisions. The group has found several redundancies in their structure, making the five operating divisions into three. This will certainly help them cut costs and perhaps be able to save a few bingo clubs in the process. They have estimated their savings to about ten million pounds in a year. However, this will also cost them almost the same figure in upfront costs of the restructuring. But nonetheless, this is one of the actions that they can take to help them slowly pay off their debt of a whopping 2.7 billion pounds, not to mention that they are at risk of breaching bank covenants if they invest cash on their balance sheet. And so they have looked on ways to get this cash without losing their lenders on their side.

As the bingo clubs in Aldridge, Hull St Stephens, Leven, Pitsea, and Port Glasgow, one hundred more jobs will be lost. And it was just a week ago that their Crystal Palace Club was just closed. However, these closures were directly related to the tax hike.

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