Mitie has shed 160 jobs and is expected to write off a further £50m as part of a review into the firm undertaken by accountants KPMG.
The staff cuts come as part of the first wave of a “cost reduction programme” at the firm, which also announced plans to negotiate an amendment to its banking covenants to permit “further one-off charges”.
The staff cull and write-downs come on top of a previous £14m write-down that the firm announced in January.
Commenting on a “challenging environment”, the firm announced in a trading update that “in addition to the £14m of one-off charges identified in the January trading update, the board currently expects to write down its balance sheet by between £40m and £50m.”
The cost of restructuring the business has increased by £5m to £15m with the firm set to reveal the full extent of it’s cost reduction programme with its preliminary annual results next month.
Earlier this year, the group reported that its property management and technical FM divisions had been “impacted by client deferrals and investment plan delays, respectively”. The firm added that its cleaning division was under-performing.
Mitie chief executive Phil Bentley said: “FY17 has undoubtedly been a challenging year but Mitie remains a strong and successful business, and is continuing to deliver for our customers.
“While these accounting adjustments in FY17 affect our reported profit, they do not affect the underlying strength of our business.
“Since my appointment as CEO in December, we have worked hard to build a new ’Connected Workspace’ strategy, with clear deliverables and measurements for customers, costs, people and technology.”