More than 100 jobs face the axe at the NEC Group following a dramatic slump in revenue from exhibitions as the economic downturn bites.
The West Midland group, which runs the NEC, ICC, LG Arena and NIA, confirmed the job cutbacks and warned the short-term outlook for the exhibitions and conference market was “poor.”
Group chief executive Paul Thandi said in a statement: “The NEC Group is not immune from the downturn in the economy and we have seen a significant drop in revenues in some areas of our business, particularly exhibitions.
“A number of our large trade exhibitions have reduced in size over the last few years due to long-term changes taking place in the industries that these shows serve. In the shorter term, some of our other trade and consumer exhibitions are also shrinking due to the economic slowdown.
“As around 60 per cent of The NEC Group’s revenue and an even bigger slice of its profit comes from the exhibition business, this has a considerable impact on the group’s financial health.
“The short-term revenue expectations from the conference business are also lower as companies cut back on expenditure and hold fewer events and in the longer term, although business prospects look strong, the nature of servicing the needs of conference organisers is changing and our business must change to reflect this. This fall in activity levels in both the exhibition and conference businesses will result in a reduction in revenue we can expect from catering within these venues too.”
Cost-reducing measures under consideration include new ways of working for some departments, reduced working hours and outsourcing of some key services to other companies.
Mr Thandi added: “Some of these proposals are likely to result in the loss of jobs. The proposals are subject to formal collective consultation.
“However, they are significant and the number of job losses could exceed 100.
“Despite the poor short-term outlook for the exhibitions and conference markets, the financial prospects for our Arenas and Ticket Factory business remain strong over the foreseeable future, with healthy levels of advanced bookings and ticket sales and the opening of the LG Arena later this year.
“Full details of the proposed changes will be announced to employees on April 16 and we will be commencing a 90-day consultation period with effect from that date. Our overriding aim remains to support our employees through this difficult period and, ultimately, to safeguard employment as much as possible – not only those employees directly employed by us today, but also the many thousands of workers in the region who rely on our continued success.”
