Flutter Entertainment to Cut Jobs Amid Tax Hikes
Flutter Entertainment, the owner of Paddy Power, announced it will cut up to 1,400 jobs. This move is part of a restructuring plan due to higher gambling taxes in the UK. The layoffs will impact about 15% of its workforce in the UK and Ireland, which totals around 9,000 employees. The cuts will affect roles in Leeds and Dublin, as well as staff in Portugal and Romania who support the UK division.
This decision follows significant tax increases introduced in the UK’s Autumn Budget last year. The remote gaming duty rose from 21% to 40%. A new general betting duty of 25% will start in April 2024, up from 15%. Kevin Harrington, Flutter’s UK and Ireland chief executive, said the gambling industry “cannot fully absorb a rise of this magnitude without reducing our fixed cost base.”
Flutter estimates that the restructuring will cost between $80 million and $90 million (£60 million and £67.5 million). The company has warned of a potential £400 million hit from the tax increases by 2027. This situation has led to the need for cost-cutting measures. The layoffs come alongside plans to review 100 Paddy Power betting shops. This review could put around 400 additional jobs at risk, although those shops are not included in the latest announcement.
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The job cuts and restructuring may affect Flutter's operational efficiency and profit margins. This could influence its stock performance. Investors may react to the ongoing changes in the UK gambling tax landscape and their impact on Flutter's profitability. Watch for Flutter's upcoming quarterly earnings report. This report will provide insights into the financial impact of these tax changes and restructuring efforts.
Based on reporting by: cityam.com, standard.co.uk