Once again there is uncertainty over the future of the small lettings division of Purplebricks.

The threat of redundancy hangs over staff across the company following the sending of a note to all employees yesterday from the new company chief executive, Helen Marston.

The letter reads:

“As you know we started the year in a challenging position with regards to our financial performance. We took decisive action as part of our plan to improve performance and although we are making progress in many areas we still have further to go.

“Today I want to update everyone on some further actions we are taking to ensure Purplebricks becomes a leaner, more efficient organisation, well equipped to succeed. Sadly that has resulted in us making the difficult decision to commence a redundancy programme across the organisation, subject to a consultation process. 

“Over the course of today [yesterday] you will be invited to a meeting to inform you whether this process affects your position and to explain what happens next.

“I know this will be difficult and unsettling and we will do everything we can to support you as much as possible if you are impacted. However it is essential that we take the necessary steps to improve our financial performance and set the business up for success.

“Thank you. Helena.”

Letting Agent Today has asked Purplebricks for an indication of how this redundancy programme will hit the lettings division but there has been no response.

The agency’s lettings division has been in the eye of the many storms surrounding Purplebricks in recent years.

Late in 2021 the Daily Telegraph broke the news that Purplebricks had – for an unspecified period of time – failed to properly serve legally-required documents to tenants explaining their deposits had been put into a national protection scheme. 

At the same time its then-head of lettings quit with immediate effect. Purplebricks put the financial liability of the error at between £3m and £9m but the Telegraph has said it could be up to £30m. In its much-delayed release of full-year figures the agency gave scant details of the problems and has still not revealed the number of tenancies affected, nor for how long.

Instead it says: “We were disappointed to discover a process issue in our lettings business in December 2021 relating to how we had been communicating with tenants on behalf of landlords about deposit registrations and prescribed information. We acted quickly to assess the extent of any potential claims and made a provision of £3.6m accordingly. We are satisfied that this amount remains appropriate. 

“The Board recognised that it was also important to learn from the issue and therefore sought independent third-party assurance in relation to the end-to-end process and controls in the lettings business. 

“We have made significant changes in line with recommendations arising from this work, including the introduction of new processes and controls, and retraining our people. We believe that our structure now supports the delivery of our strategic goals whilst providing a better customer experience. 

“We have now employed our lettings field team, which enables us to have more control over the customer experience, compliance and capability of our people. I am confident that we will soon have the platform to establish Purplebricks as the lettings agent of choice.”

In August Purplebricks announced it had taken on a new director of risk and compliance, following its lettings division’s high profile compliance error last year.