The NEC Group is to restructure its staffing in the wake of falling exhibition and conference revenues, with chief executive Paul Thandi predicting over 100 employees could lose their jobs in the process.
“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,” says Thandi. “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 general economic slowdown.
“As a result, our revenue expectations from the exhibition business over the next few years are significantly lower. As around 60 per cent of The NEC Group’s revenue and an even bigger slice of its profit come from the exhibition business, this has a considerable impact on the Group’s financial health.”
Thandi acknowledges that the announcement of likely job losses is “difficult and worrying news” for employees but says: “The 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 as a business, now and in the future.”
Thandi adds that the nature of servicing the needs of conference organisers is changing and the The NEC Group’s business must change to reflect this.
Thandi expects the fall in activity levels in both the exhibition and conference businesses to result in a reduction in catering revenue within the venues.
Thandi notes that costs are also rising.
An NEC Group review has resulted in proposals to be put to the workforce, 16 April, including:
- New structures, or ways of working, for certain departments
- Potential for reduced working hours during periods of lighter activity levels
- Potential outsourcing of some key services to other companies
There will then be a 90-day consultation period with effect from that date.
Despite the poor short-term outlook for the exhibitions and conference markets, the NEC Group says financial prospects for its Arenas and Ticket Factory business remain strong.