Citi sees job cuts among European internet players to lead to margin uplift

Cazoo

25/08/2022 14:02

** Citi Research sees job hiring slowing down while layoffs
are on the rise among European Internet players
    ** "New job listings across the Internet sector have reduced
significantly in recent months (down -58% YoY in July), with
online autos, food delivery and online classifieds leading this
decline," the brokerage says   
    ** By region, job listings are down most in Europe
(excluding UK), given recent macroeconomic trends, while the UK
and Americas' listings look comparatively more robust, it notes 
    ** Just Eat Takeaway  TKWY.AS , AUTO1  AG1G.DE , Cazoo
 CZOO.N , Schibsted  SCHA.OL  and Prosus  PRX.AS  are most
actively slowing down hiring, Citi says, while there is no
discernible change in job listing trends at Rightmove  RMV.L ,
Auto1, Entain  ENT.L  and Flutter  FLTR.L 
    ** The brokerage flags that announced job cuts across the
sector average 17% of workforce, and adds that a 10% cut to
staff costs should lead to an adjusted EBITDA margin uplift of
up to +4pp across its universe of Internet players
    ** Online subsectors classifieds, gambling and food delivery
are likely to benefit the most from the job cuts, Citi says 
    ** It sees Deliveroo  ROO.L , as well as Just Eat Takeaway,
Schibsted, Cazoo, Entain and Flutter (excluding in the U.S.) to
have the greatest scope to cut jobs

 (Reporting by Dina Kartit)
 ((dina.kartit@thomsonreuters.com))