Travelex is set to make more than 1,300 UK employees redundant, despite striking a rescue deal that will prevent the business collapsing altogether.
Administrator PwC said late on Thursday (6 August) a December 2019 cyber attack on the business, followed by the Covid-19 pandemic, had "acutely impacted" the forex firm.
While a restructuring deal and pre-pack administration will allow the business to preserve 1,800 UK roles, 1,309 UK employees have been made redundant with immediate effect.
The deal will see certain parts of Travelex’s operation sold to a newly-created business, Travelex Acquisitionco Limited, controlled by the firm’s creditors.
In the UK, PwC said this would largely comprise Travelex’s the UK wholesale and outsourcing businesses that service major corporate and supermarket customers, in addition to Travelex’s non-airport ATM estate.
However, PwC confirmed many of Travelex’s airport and high street branches have not been sold "as the majority of the UK retail business is no longer trading".
Joint administrator Tony Banfield said the complex deal and restructuring would allow a "core part" of Travelex’s business to continue operating under new ownership.
“The completion of this transaction has safeguarded 1,802 jobs in the UK and a further 3,635 globally, and ensured the continuation of a globally recognised brand," said Banfield.
"Unfortunately, as the majority of the UK retail business is no longer able to continue trading, it has regrettably resulted in 1,309 UK employees being made redundant today [Thursday]."
Travelex was impacted by a major cyber attack on New Year’s Eve, forcing it to take its customer-facing systems offline for several days, with some services unavailable for weeks.
PwC said a subsequent "sharp decline" in air passengers caused by the coronavirus pandemic had severely impacted Travelex’s business.
The business sought a buyer in April, but in mid-June, it confirmed the process had been halted to instead pursue a long-term restructure.