Communisis has announced that it will reduce the headcount at its Cross Gates Leeds facility by around 75 as a response to declining direct mail volumes.
The London-headquartered marketing provider detailed the cuts in its Q1 statement yesterday morning (15 May).
The firm said the planned cuts would result in an estimated exceptional charge of approximately £1.5m in the second quarter. A consultation for the rationalisation has commenced today.
“Direct mail is in decline in certain areas so we’re reacting to that situation but trying to do so in a measured way. This sort of news is always unfortunate and regrettable but we’ll deal with it appropriately and sensitively,” said chief executive Andy Blundell.
“It’s not a withdrawal from the market in any sense and in fact what we’ll be doing is making more use of our outsource type of arrangement rather than direct manufacture in some of those areas.
“The Cross Gates facility currently has 432 staff, which will be cut by around 75. But when you include our other operations in the area, our post-rationalisation headcount in Leeds and West Yorkshire is still 787 so we’re still a major force in the region.”
The Q1 statement also showed other more positive news for the firm with developments in all three of its business segments.
A contract extension to provide external brand building services for Procter & Gamble until the end of 2019 has strengthened the managed service proposition in Communisis' Deploy section.
Two small acquisitions in the company’s Design segment have brought it video and film production expertise and digital creative capabilities.
And a second long-term contract with Lloyds Banking Group for an initial 10-year term has added inbound imaging and mail processing as a new service line within its Produce segment.
“We’ve had a whole string of good news in terms of growth, acquisitions and new contracts so it’s a bit of a mixed picture but overall we’re feeling positive about this sort of growth,” said Blundell.
The firm will announce interim results for the six-month period ending 30 June 2014 on 31 July 2014.