175 jobs to go as 'pay day' lender shuts Irish office
An Irish-backed 'pay day' loan provider which once charged an annual percentage rate (APR) of almost 6,000pc is expected to shut its Dublin office with the loss of 175 jobs.
Britain's biggest short-term loan provider, Wonga, announced its intention to close its office on Sir John Rogerson's Quay by mid-2016 as part of a bid to reduce its "high cost base".
Wonga is backed by Balderton Capital, a venture capital firm founded by former chief executive of Esat Digifone, Barry Maloney.
The Irishman's firm was named last year as one of the companies which used Luxembourg's complicated corporate structures to lower its tax liability.
Wonga chairman Andy Haste said the company "can no longer sustain its high cost base which must be significantly reduced to reflect our evolving business and market".
A total of 325 jobs could go as part of the restructuring, with its office in Tel Aviv, Israel also due to shut later this year.
As part of the restructuring plan, Wonga will now focus on its core consumer businesses in the UK and overseas.
The group is aiming to make overall cost savings of at least €34m across the next two years, after a period of rapid expansion that saw costs treble between 2012 and 2014.
Wonga's downsizing comes following a series of controversies which hit the industry last year.
The company, which employs 950 people internationally, was forced to pay out €3.5m in compensation to 45,000 customers last June after it issued fake legal letters to chase outstanding debts.
The announcement came on the same day the UK's Competition and Markets Authority announced new rules to force 'pay day' lenders to be more transparent about their charges.
Britain's Financial Conduct Authority tightened regulations on short-term loan providers since its appointment last April.
Such companies can no longer roll over a loan more than twice, or try to reclaim payment from a client's account more than twice.
A spokesman said Wonga offers a daily interest rate of 0.8pc on 30-day loans.
Mr Haste said: "Wonga can no longer sustain its high cost base. We've had to take tough but necessary decisions about the size of our workforce."