Job Cuts at Flutter's International Sites

Paddy Power-owner Flutter has revealed plans to slash up to 1,400 jobs worldwide due to increasing tax burdens on the gambling industry.

The job cuts will primarily affect staff in Leeds and Dublin, as well as employees working for the UK and Ireland business at Flutter's international sites in Portugal and Romania. However, the company has not disclosed which specific roles are at risk of being eliminated.

The recent tax hikes imposed by governments on online casino and sports betting have significantly impacted the industry, with an exemption granted to horse racing. The tax increases aim to regulate and stabilize the market, but critics argue they could push unlicensed operators into the forefront.

Flutter's global workforce totals 28,500 employees, including 9,000 based in the UK and Ireland, where the company operates several major brands such as Sky Bet and Betfair.

The restructuring of Flutter's business will involve a significant reduction in its workforce, with around 1,400 jobs being cut.

According to David Harrington, chief executive of Flutter's UK and Ireland operations, the company cannot absorb the full impact of recent tax increases without making changes to its cost base. This decision was made after Flutter warned last year that it would struggle to cope with a significant rise in taxes.

A government spokesperson has distanced itself from the job cuts, describing them as a commercial decision for Flutter rather than a policy issue. However, they did acknowledge that the workers affected by the redundancies will face a difficult time.

Flutter's financial performance has been impacted by the tax rises, with the company reporting a $299m pre-tax loss in its latest quarterly results. This is a significant reversal from last year's profit of $205m in the same period, and highlights the challenges faced by Flutter in adapting to changing regulatory environments.

Flutter's restructuring plan, which includes cutting 1,400 jobs, is expected to cost between $80m and $90m. This move comes as a response to rising betting tax rates in the UK, which have been implemented to curb problem gambling. The company had previously warned that these tax hikes would significantly impact its profits.

The new tax regime, set to come into effect next year, will see general betting duty rise from 15% to 25% online, while remaining at 15% for betting shops. This change has led betting firms to anticipate job losses and shop closures as they struggle to adapt to the increased costs. Some companies had already begun taking measures in response, such as Entain's announcement of 500 job cuts.

The restructuring plan is aimed at mitigating the impact of these tax changes on Flutter's underlying profit, which is expected to be hit by $320m this year and $540m in 2027. By cutting costs and streamlining operations, the company hopes to navigate the challenges posed by the new regulatory environment.