Exclusive: Banking consultancy 11:FS cuts salaries, sacks staff and furloughs 15% of workforce

UPDATE 06-05-2020 – Article amended to reflect details in this 11:FS blog post, including that employees earning less than £30,000 were excluded from the 15 per cent salary cut.

Financial consultancy 11:FS has launched a swathe of cost-cutting measures amid growing financial difficulties.

Several former employees described measures to AltFi that included a regressive blanket salary cut of 15 per cent across the company, the furloughing of dozens of 11:FS’s most junior employees, and a "steady drumbeat" of people being laid off.

The former employees, who asked not to be named, all described concern among 11:FS senior leadership that banking clients were cancelling projects and reigning in their spending on consulting.

"Consulting tends to come to a screaming halt during these times of economic crisis,” one former employee told AltFi.

“A lot of the work that was ‘about to land’ didn’t feel like it was going to land.”

Pointing to the salaries of senior leadership remaining in excess of £250,000 at a time when junior staff were being furloughed onto the taxpayer-funded Coronavirus Job Retention Scheme, the former employee added: "they're not being honest about their cash position".

On Friday (1 May) the senior 11:FS leadership team announced a company-wide salary cut of 15 per cent across the board for permanent employees and 20 per cent for contractors, to last at least 3 months, AltFi can exclusively reveal.

This blanket cut affected all staff at the same rate, acting as a regressive measure by impacting the consultancy’s lowest-paid members of staff the hardest.

“If you're earning less than £25,000-a-year, that's pretty brutal,” another former employee told AltFi.

Following AltFi’s article, 11:FS published a blog post explaining that employees earning less than £30,000 would be exempt from the 15 per cent pay cut.

During this announcement, both group CEO David Brear, deputy CEO Jason Bates and chairman Shaun Meadows said they would take a much higher 75 per cent pay cut.

Around the same time 11:FS used the Coronavirus Job Retention Scheme to place 26 of its employees on furlough, roughly 15 per cent of its total workforce.

These employees largely came from 11:FS’s media and marketing teams which help produce its popular podcasts, videos and written content, along with operations and recruitment. Revenue-generating teams like Pulse, Foundry and Consulting were unaffected, as were the personal assistants of the company’s senior staff.

All three former employees AltFi spoke with described a series of sporadic layoffs which steadily increased in pace between February and April.

And as 11:FS raced to apply the measures described above, newly hired employees were caught in the crossfire.

One recent hire at the consultancy was left in limbo as 11:FS repeatedly deferred their start date after they had already signed a contract and were leaving a previous job.

"It became quite clear that they were planning on keeping my start date deferred until such time as they won new clients," the hire told AltFi.

"That's not fair and that's not a nice way to operate in my opinion."

11:FS told AltFi that on the subject of new hires: "a small number have had start dates deferred but these employees are still continuing to join us."

With regards to redundancies 11:FS said: "Like any company we’ve had staff turnover in the period, and not all of it is related to COVID and the market conditions. The purpose and hope of furloughing some staff now is to avoid making redundancies."

In response to AltFi's questions, group CEO David Brear said:

"Four years of amazing work from the 11:FS team has left us in a better position than many to weather the storm that the global COVID-19 pandemic is causing, but like everyone in financial services we’re not immune to the slowdown happening around us."

"Our number one priority is always to look after our people and our clients, so in order to protect the foundations of what we’ve built, we’ve decided to furlough to a number of team members."

"This will mostly affect support functions like Media, Marketing, Operations and Recruitment staff. We’ve ensured however that all our client and service teams remain intact to keep delivering our best work."

"We’re more focused than ever to get through this pandemic and continue to build 11:FS."