The new private owner of awarding giant City & Guilds is planning to cut its workforce bill by relocating some jobs to Greece where personnel costs are “up to 50 per cent lower”.
According to a presentation to investors, PeopleCert, the Greek-owned company that FE Week revealed had bought City & Guilds in October, hopes to cut £19 million from its permanent and short-term staff costs in the next 24 months.
The report said around £13 million of the savings will be made from “personnel cost synergies”, with “optimisation” to be driven through “natural employee churn”.
Around 19 per cent, or 247, of City & Guilds’ 1,300 employees are understood to leave the company each year – meaning that within the next two years about 494 roles within will be vacated.
One third of the vacant roles will be made “redundant” due to “overlapping functions”, another third will be relocated to Greece where costs are “up to 50 per cent lower,” and the remaining third rehired in the UK, the presentation suggested.
A spokesperson for City & Guilds said: “Our long-term goal is to create opportunities through strategic investment in technology and innovation that scale our impact. Whilst some jobs may change through natural attrition, others will be created through strategic expansion, enabling greater efficiency and effectiveness for our learners and customers in an increasingly digital and AI enabled world.
“PeopleCert has committed to significant investment in our infrastructure, enabling us to strengthen our offers, while ensuring we deliver the quality and experience our customers and learners deserve.”
Plans are also afoot to save £6 million per year at City & Guilds by cutting the cost of its 1,800 industry “associates”, which it describes as assessors working through short-term contracts.
The company believes it can “significantly increase” its associates’ productivity through technology, renegotiating their rates “by 10 per cent” to align with the wider group of companies, and increasing the number of assessments they oversee from “1.4 a day to close to 4 a day”.
The City & Guilds spokesperson added: “Our work at City & Guilds continues as does our commitment to skilled, experienced associates who remain a cornerstone of how we deliver quality assessments and training.
“Existing contracts remain in place. As part of PeopleCert, we will be investing in technology and processes designed to make working with us easier, while maintaining the professional standards and support our associates and learners expect. These improvements are focused on reducing administrative burden, improving access to resources, and enabling more efficient scheduling and communication.”
The sale
City & Guilds, founded in 1878, ended almost 150 years of charitable ownership this year to “secure its future”, leaders said.
The decision came amid ongoing reforms to technical education qualifications, apprenticeship assessment and higher-level training, disrupting market conditions for the awarding sector.
City & Guilds is the second largest qualification awarding organisation in England by number of certificates issued and the largest provider of apprenticeship end-point assessments, according to Ofqual.
The awarding body was acquired by PeopleCert in October this year, joining a group of training and assessment businesses including ESOL awarding body LanguageCert and a project and portfolio management company AXELOS.
Through the sale, the awarding body’s former owner, charity City & Guilds of London Institute, received an undisclosed sum that includes up to £200 million in “gross assets under management” and up to five years’ rent-free office space, allowing it to grow to become an “innovative social investor and change maker”.
City & Guilds said the sale was worked on with support from relevant regulators and the Charity Commission.
When the sale was announced, staff were told there would be “no job losses” as a result of their transfer, but that “changes could happen later” for legitimate business reasons.
The PeopleCert presentation, first reported by The Guardian and seen by FE Week, says the Greek-owned company sees the purchase of City & Guilds as a “clear opportunity” to turn the awarding body into a “best-in-class, lean corporate structure”.
It more than doubled the Greek group’s annual revenue from £115 million to £277 million.
The presentation sets out a range of “synergy” efficiencies between the awarding body and its new owner, including slashing personnel costs from 69 to 54 per cent – closer to the wider group’s 26 per cent cost base.
It also reassures investors that its “fully scalable technology platform” can rapidly adapt to new business models and that 60 per cent of City & Guilds’ revenue is “underpinned by stable government funding schemes” including 16-19, adult education and the apprenticeship levy.
PeopleCert said it wants to capitalise on a “unique market opportunity” as non-profit competitors in the awarding sector “consider divestment in response to technological disruption and AI”.
The presentation suggests the wider group want to leverage the City & Guilds for future acquisitions, ultimately moving towards a “first-of-its-kind” Global University of Applied Skills – a project the group is yet to discuss publicly.
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