The training and qualifications body City & Guilds is shrinking its UK workforce as part of a £22m cost-cutting drive after it was acquired by a private Greek business in October.
Founded in 1878 by the City of London and a group of 16 livery companies, the original institute developed a national system of technical education, offering qualifications and apprenticeships in fields ranging from manufacturing and mechanical engineering to hairdressing and horticulture.
In the autumn it was announced that the charity was selling its training and awards business, City & Guilds (C&G), for an undisclosed sum to PeopleCert, an international certification company.
PeopleCert informed investors this month that the deal offered a “compelling opportunity to make [C&G] a leaner organisation”.
In a presentation aimed at its financial backers and published via its website, it said it had identified £22m of savings at C&G, of which £13m were “personnel cost synergies” that would largely be achieved by failing to replace staff leaving the institute with hires from the UK.
The document implies that C&G, which has 1,800 staff, has a churn rate equivalent to about 340 people leaving a year. It outlines how PeopleCert plans to relocate a third of those jobs to Greece “at a cost [of] up to 50% lower”. The same quantity of roles “are due to not be replaced due to overlapping functions”, the presentation sets out, while the remainder will be rehired in the UK.
The result will slash personnel costs as a proportion of revenue by 15 percentage points from 69% to 54% within two years, with a target of eventually matching the Greek group’s ratio of 26%.
There is a “clear opportunity to transition C&G operations from a non-profit business model to a best-in-class, lean corporate structure, unlocking further profitability”, the presentation adds.
The plan to replace skilled UK staff with lower-cost alternatives and cut the workforce by attrition might appear out of place with the image of the City & Guilds of London Institute (CGLI), which has made its reputation by helping people become more employable and increasing their skills since Victorian times.
The charity’s famous alumni include the celebrity gardener Alan Titchmarsh, the television chef Ainsley Harriott and the fashion designer Karen Millen.
CGLI said the deal selling C&G to PeopleCert would “unlock new opportunities” for the qualifications body, including access to technology that it said would improve its training services.
A spokesperson said: “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.”
They said the proceeds of the sale generated “a significant fund” for CGLI, which now operates as a “social impact charity” called City & Guilds Foundation.
“Whilst an exact figure cannot be revealed, along with the proceeds of this sale, CGLI will have circa £180m-£200m in gross assets under management to ensure its long-term sustainability and continued commitment to skills,” the spokesperson added.
“All the gains from the sale were accrued to CGLI/City & Guilds Foundation, which now operates independently from C&G Ltd.”
The charity focuses on services to help people progress in the workplace, including training bursaries and funding to support “displaced people, former offenders, and those from lower socioeconomic backgrounds”.
PeopleCert did not respond to efforts to contact it. The Greek company will retain the City & Guilds brand for its training courses.
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