BNP Paribas Real Estate is proposing to make 70 roles in its UK business redundant.
The move is part of a restructuring of its UK division to focus more on transactional businesses and successful Central London businesses in order to increase profitability.
It is understood that the restructuring is currently only at the proposal stage, and that the exact 70 positions being made redundant have not been confirmed. It is thought that BNP Paribas Real Estate is looking to remove businesses that have not been profitable over the long term or where it does not see potential for strong growth in 2012.
The redundancies would account for less than 10% of the UK workforce, and are not being mirrored in the European business. It is unlikely that the headcount of the business will drop by 70, as the company is looking to hire in successful areas such as Central London.
A spokeswoman for the company stressed that the restructuring was designed to be proactive in terms of increasing profitability, rather than reactive in terms of the gloomy outlook for the UK real estate sector, and added that it was not caused by the wider pressure on French banks resulting from the Eurozone debt crisis.
“BNP Paribas Real Estate can confirm that it is proposing to remove approximately 70 roles in the UK,” the spokeswoman said. “The proposal is to restructure the business in order to continue to provide the best service to clients. The company will continue to invest in areas in which it can provide a sustainable service to meet the needs of its clients.
“This reorganisation is part of a strategy developed by the board of BNP Paribas Real Estate UK. It is not a decision made by the parent company, BNP Paribas, in the framework of its previously announced adaptation plan to the new regulatory environment.”
BNP Paribas Real Estate made earnings before interest and tax of £2.9m in 2010, according to Property Week’s latest agency survey, ranking it 12th in the UK, from revenue of £63m. This compared to EBIT of £3.2m from £63m of revenue in 2009. On an overall basis, the UK accounted for 12% of the firm’s EUR618m revenue in 2010.
The company went into the summer in a seemingly bullish position, having tabled a deal that would have seen it buy struggling rival DTZ from the listed company’s majority shareholder, Saint Georges Participations, with a price of 60p a share mooted.
But while talks on a takeover were initiated, no formal proposal was made, and after five months it was announced that DTZ would put itself up for sale, a process which resulted in its eventual takeover by Australian services firm UGL in a deal that saw shareholders receive nothing.