Nordic online gaming company Kindred Group is slashing its workforce, but maintains that the COVID-19 pandemic has nothing to do with it.
The Times of Malta quoted a Kindred spokesperson on Friday saying that the company is expected to retire about 75 workers. The cuts are currently being spread across the 13 regional offices of the organisation in Europe, Australia and the USA.
The spokesman said the company hadn’t disclosed publicly the number of workers in each office facing the axe, but said the formal consultation process on the cuts would start later in the month.
The spokesman said the decision to cut salaries was “very tough and painful” and these steps “will always be a last resort.” However, the spokesman admitted that this was still “a challenging time” and vowed that the organisation would do“all we can to support impacted individuals as much as possible through this period.”
The spokeswoman said the cuts are “not related to the current COVID-19 situation,” but planned to “make business operations leaner and stronger to better support the strategic objective to deliver long-term, sustainable revenue from regulated markets.”
Kindred’s 2019 Annual Report shows pre-tax income dropping 55 percent from 2018, partially due to lower sport margins but also due to hiccups in many controlled European markets, with Sweden alone accounting for £ 6.6 million in lost sales. The emphasis now is on measures that would “increase efficiency and reduce operational costs.” It is pure conjecture, but it’s hard not to wonder whether the redundancies could have been avoided whether Sweden’s gaming regulator did not place a SEK100 m (US$ 10 m) fine on Kindred for breaking the regulations on incentive payments to local clients.
Last week, Kindred CEO Henrik Tjärnström predicted that COVID-19’s effect on Kindred’s operations would not only be short-lived, but would also accelerate the transition from land-based bettors to the online world, which would give Kindred a pleasant boost from. On April 24, when Kindred is scheduled to announce its Q1 financial results, which is when they will find out if his the prediction works out.
The pandemic has not, as of yet, disrupted Kindred’s plans to hold its annual general meeting on May 12 at its office in Stockholm. However, Kindred has firmly urged shareholders to consider voting on the agenda items by proxy in compliance with the government’s instructions re mass gatherings.
Kindred’s share price closed Friday’s trading up 2.5 percent to SEK38.08, a huge improvement compared to the SEK23.08 low on March 19 but still well below their SEK57.16 2020 peak on February 20.