Hundreds Of Jobs Face The Axe At Lancaster Timeshare Company

JOB cuts are planned at a Lancaster timeshare firm which lost more than £30million last year.

Sunterra Europe – with headquarters in Caton Road and a payroll of 260 – has warned that costs have to be cut significantly. A company report says up to
£6.3million should be set aside for redundancy payments across the firm. Chief executive David Harris – with an annual salary of more than £200,000 plus bonuses – has already departed.

Sunterra Europe is a subsidiary of the Las Vegas-based Sunterra Corporation. American bosses brought in consultants to look at the loss-making European business, which has 34 resorts.

Nick Benson, worldwide president and chief executive, said: "The company (Sunterra Corporation) has decided to make some significant changes in its European operations.
"The European business will be reduced and unnecessary and duplicative costs will be eliminated or reduced.

"New member marketing programmes will be curtailed, management streamlined and infrastructure reduced."

The plan aims to produce "substantial" cuts in European costs by August this year.
Sales, marketing and advertising were areas where "improvements" are required.
Company documents refer to 13,000 unsold timeshare weeks on the books of the European operation.

Spending of up to $12million is expected in connection with the changes, which follow depressed market conditions. Sunterra Europe marketing director Jim Shannon said the company was reviewing its European operation.
"We are looking at a number of proposals. We have entered a consultation period with people who might be involved."

Mr Benson – formerly Lancaster-based as Sunterra's European chief – was spending time in the city each week seeking to resolve the problems.

The firm went through a redundancy programme last year.
Sunterra Corporation, which is among world leaders in timeshare, has been advised by the consultants to concentrate on its strengths in North America.

The corporation emerged from bankruptcy under US law in July 2002. Sunterra Europe moved its headquarters from Pine Lake, near Carnforth, to Citrus House in Caton Road, in 2001. It has pledged to maintain services to members, despite the cuts.

Meanwhile the company has voluntarily handed over $3.1million (£1.63 million) to Spanish tax authorities with another $900,000 (£474,500) expected to follow. This was in respect of past underpayment of tax.