Paddy Power Betfair seeks £25m in workforce cuts
Circular sent to Betfair shareholders reveals reduced staff numbers will account for half of £50m cost synergies
Paddy Power and Betfair look set to make significant cuts their combined workforce in order to meet half of the estimated £50m cost synergies expected from their proposed merger, a circular issued to Betfair shareholders has revealed.
According to the circular, a combined Paddy Power Betfair would achieve cost savings of £25m by reducing its headcount, with the other half coming from non-payroll related efficiencies in IT, property, services and marketing.
However both operators said their evaluation of cost synergies were at a preliminary stage and proposals of how they would be implemented had not been developed, including how specific employees or locations may be effected.
A Paddy Power spokesman told eGaming Review there would “likely be some job losses over the coming years” to remove duplications across common roles within the two groups, but “no decisions have yet been made on how many jobs and when”.
“For regulatory reasons, only once the transaction is completed can full integration planning commence,” the spokesperson said. “This deal is about better positioning the combined group for growth and this will ultimately create new roles and opportunities in the future.”
The circular sent last week also revealed Paddy Power CEO Andy McCue, who is set to be COO of the merged entity, would receive substantial compensation if he felt his role has been diminished and opted to leave the firm within 12 months of the merger completing.
McCue’s salary (700,000), bonus (up to 100% of salary) and pension (20% of salary) will remain the same, however he will receive severance pay of two and a half times his salary on exit, should he decide to leave within the first year. Betfair CEO Breon Corcoran will assume the top job across the newly merged operator.
Paddy Power shareholders will meet to vote on the deal at an extraordinary general meeting on 21 December.