Neteller plc, the publicly-listed money processor of choice to the online gambling industry, today announced a further shrinking of its staff numbers following its decision to close business with its US customers.
Neteller had, until last month, continued to do business with US customers, following the passing of the Unlawful Internet Gambling Enforcement Act of 2006 last October, while it awaited the outcome of consultation in the US about how that Act would be administered in practice by affected financial institutions.
Not being a US corporation itself, Neteller plc was residing in a legal "grey area" but the arrest of two of its former founding directors and the subsequent statements made by the US Attorney's Office about Neteller's historical role in the US gambling arena were swiftly followed by a voluntary suspension in trading of the company's shares on the London Alternative Investment Market, and the subsequent decision to pull out of the US.
Now Neteller plc has stated:
"As a result of the group's voluntary withdrawal from the US market, the group has substantially completed the necessary reorganisation and restructuring of its operations to reduce its headcount and align related costs with anticipated revenues of its worldwide business."
The group's Canadian operations, based in Calgary, served the US market but transfer volumes and customer enquiries through the group's contact centres have decreased substantially following the US withdrawal. Redundancies are expected to number around 220 employees.
The UK doesn't escape unscathed either. A further 30 employees are expected to lose their jobs when the group's Gatwick-based operations are merged into its Netbanx premises in Cambridge, a move that should be completed by the end of March.
These changes will result in Neteller's headcount having more than halved since its peak during 2006, from over 1,000 to a little more than 400 across its European, Americas and Asia Pacific operations.
The total cash costs associated with staff restructuring are expected to be in the region of $1,100,000 in 2006 and a further $3,700,000 in 2007.
President and Chief Executive Officer of Neteller plc, Ron Martin said:
"The events of the past months have led to challenging times for the group and the board has taken these measures to ensure the group has a sustainable business going forward. We would like to thank all of our employees who have contributed to the growth of the Neteller business over the past few years, and for those who have left or will be leaving the group, we wish you well for the future. The board believes Neteller continues to have a strong future ahead and presents many exciting opportunities for its employees."
Investors continue to be on tenterhooks while the group's shares stay suspended "…in view of the continuing uncertainty…."
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