Entain, the owner of Ladbrokes and Coral, is consulting on cutting around 400 customer-service roles, mainly in the UK, out of a total of around 2,000.
The company had already cut 500 jobs this year before the latest round of redundancies. The move comes as Andy Burnham, the Prime Minister, weighs up higher taxes on slot machines, which would affect betting shops and adult gaming arcades.
Letter to the Prime Minister
Stella David, the chief executive of Entain, warned Mr Burnham in an open letter last week that hundreds of betting shops and thousands of jobs would be at risk from further tax rises.
She wrote: “You have spoken about the Makerfield Test, the principle that national policy should deliver for places and people that have too often been overlooked by Westminster.
“A substantial increase in machine games duty (MGD) would bear directly on many of the people and places the Makerfield Test is intended to support.”
According to Ms David, doubling the rate of the levy would add £100m to Entain’s annual tax bill. The standard rate of machine games duty is currently 20 per cent, according to HMRC guidance.
She added: “Independent modelling from EY shows the potential consequences across the sector, indicating that a 40pc MGD rate could lead to up to 1,470 betting shop closures and 15,900 job losses, and ultimately result in a net loss to the Exchequer of around £120m.”
Ms David said job cuts resulting from higher taxes would disproportionately affect young people and women working part-time.
She also wrote: “A further doubling of machine games duty would therefore add another significant cost to businesses already struggling to absorb major tax increases, stacking the odds against labour-intensive high-street operators and making it harder to sustain shops, jobs and investment in local communities.”
Government and industry positions
Mr Burnham and John Healey, the Chancellor, are understood to believe that slot machine venues open 24 hours a day are damaging lives and high streets.
Gordon Brown, the former Labour prime minister, is among those calling for higher taxes on gambling.
Industry leaders have warned that further tax rises on the sector would push gambling towards unregulated markets, which they say cause more harm. Other operators have made similar warnings before, with Betfred saying last year that higher gambling taxes could close 1,300 betting shops.
Rachel Reeves, the former chancellor, raised taxes on online gambling from 1 April this year, with a further levy due to take effect a year later. The changes are forecast to raise an extra £1.2bn from the sector by the start of the next decade. At the time, William Hill owner Evoke warned that thousands of jobs were at risk after the online gaming tax increase.
Hiring slowdown
The Entain cuts come against a wider fall in employment. Figures published yesterday by the Office for National Statistics showed 145,000 fewer people on payrolls in August than a year earlier. The ONS said the August estimate is provisional and likely to be revised.
Retail has recorded the largest job losses, according to the figures.
Increases to the minimum wage above inflation and a £26bn rise in employer National Insurance contributions under the current Government have been cited as factors behind the economy-wide slowdown in hiring.
