Poundworld administrators have cut dozens of jobs at the discount retailer’s head office, a week after the chain’s collapse.
Sky News sources confirmed 98 of 270 staff at the West Yorkshire site were let go with immediate effect at a meeting on Monday morning – with one person describing how many workers left in tears.
The bargain chain brought in Deloitte as administrator on 11 June, following the failure of talks to find a buyer and secure the jobs of its 5,100-strong workforce.
Poundworld, owned by TPG Capital, continues to trade normally with all its 355 stores open while Deloitte finalises a process that is expected to result in only parts of the chain being bought up.
Discounters have been among the big winners within UK retail since the financial crisis but its demise was blamed on the “extremely challenging” trading environment that surfaced last year.
Chains faced surging costs at a time of trouble for household budgets – squeezed by wage growth failing to keep pace with Brexit-linked inflation.
Poundworld’s collapse followed that of Toys R Us UK and Maplin while a string of other well known names have announced rescue plans or cut down on their high street operations.
Image: Maplin and Toys R Us have also collapsed this year
A person who lost their job at Poundworld on Monday described how staff affected by the cuts were told their fate.
The former employee said: “We arrived at work yesterday as usual and employee representatives were gathered together from around the building.
“They went to a meeting, came back and we ended up getting an email then to meet in the canteen space at 11am.
“They (administrators) said they hadn’t found any buyers but were still hoping to sell off chunks of it. We were let go with immediate effect.
“The mood was horrible. Lots were crying. They knew it was coming at some point but it was still a shock. Really sad.”
The person acknowledged the effects that the weak pound had inflicted on the business.
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But the ex-worker also claimed changes to the layout of stores and especially shifts in price, with multi-buys costing more than £1, damaged the Poundworld brand in the eyes of many customers.
It is understood Poundworld introduced some multi-buys in an attempt to give it some flexibility to offset weak margins caused by the Brexit-hit pound but the owners believe tough conditions for the high street ultimately cost the chain its future.