The takeover of welfare-to-work provider A4e will not lead to frontline job losses, buyer Staffline has confirmed — but backroom posts from both companies could be in jeopardy, it said.

The £35.4m deal, reported by FE Week last month, will make Nottingham-based recruitment service firm Staffline one of the biggest Department for Work and Pensions (DWP) Work Programme contractors, the company claimed.

A spokesperson for Staffline said: “We’re fortunate in that they’re operating in completely separate contract areas.

“No frontline staff job losses. But over the next three months work will take place to review back office jobs — but we don’t really know what the results will look like yet.”

She confirmed that existing Staffline jobs, as well as those from A4e, would be considered under the review. Staffline currently employs around 2,000 staff and A4e has roughly the same number.

Staffline’s recruitment division, which had a final 2014/15 Skills Funding Agency (SFA) contract worth £540k, was rated as good by Ofsted last month. Its Eos Works division was allocated £955k of European Social Fund (ESF) cash by the SFA while Avanta, a £65m acquisition last summer, had an SFA allocation of £8.2m and was rated as good by Ofsted last month.

A4e had a £30m SFA allocation and posted pre-tax losses of £11.5m in 2012-13, but had climbed to a pre-tax profit of £2.2m for the year ending March 2014.

The buyout, which includes the transfer of £11m of A4e debt to Staffline, will mean Staffline has a presence in half of the DWP Work Programme’s 18 regions as a prime contractor — through its Eos and Avanta divisions, and now A4e — and six further regions as a sub-contractor.

The firm claims the takeover will give it access to learners through 150 sites throughout the UK — which, it claims, is the largest geographical reach of any Work Programme contractor.

Staffline chief executive Andy Hogarth said the company was “delighted” by the acquisition, calling it “an exciting milestone in Staffline’s growth”.

It is understood that Avanta and Sheffield-based A4e will be “integrated” and rebranded PeoplePlus over the
coming months.

The move comes three months after 10 former A4e employees were sentenced for fraud and related offences after falsely claiming to have found work for learners who were unemployed or did not exist. Its control systems were since said to have been improved.

Andrew Dutton, chief executive of A4e, said the buyout meant “starting a new chapter in the history of A4e”.