Arsenal have announced they are proposing 55 redundancies due to the ‘significant and long-lasting’ financial implications caused by the ongoing coronavirus pandemic.
The north London club, whose owner Stan Kroenke’s wealth is estimated at £6.3 billion ($8.3bn), confirmed the news in a joint statement released by head of football Raul Sanllehi and managing director Vinai Venkatesham on Wednesday afternoon.
“We do not make these proposals lightly and have looked at every aspect of the club and our expenditure before reaching this point,” read the statement. “We are now entering the required 30-day consultation period on these proposals.
“We know this is upsetting and difficult for our dedicated staff and our focus is on managing this as sensitively as possible.
“These proposed changes are ultimately about ensuring we take this great football club forward, creating the right organisation for a post-Covid world, and ensuring we have the resources to return to competing effectively at the top of the game here and in Europe.”
When lockdown began in March and football was suspended, Arsenal refused to use the government’s furlough scheme and continued to pay their full-time staff, despite the club’s key revenue streams all drying up.
The money they would usually have received for 2020-21 season tickets has not come in and nor has match-day income – which accounts for 24% of Arsenal’s annual revenue.
Refunds, which worked out at over £2m ($2.6m) per match, had to be given for the four home games that were played behind closed doors following the restart and there is still no clarity over when fans will be allowed back inside stadiums once again.
It has been estimated by the Arsenal Supporters’ Trust that the club could lose up to £144m ($178m) should the entirety of the 2020-21 campaign be staged behind closed doors, with commercial and broadcast revenues also suffering.
“Our main sources of income have all reduced significantly,” said the statement released by Sanllehi and Venkatesham. “Revenue from broadcasters, matchday and commercial activities have all been hit severely and these impacts will continue into at least the forthcoming 2020-21 season.
“The pandemic represents one of the most challenging periods in our 134-year history and we have responded promptly by implementing wide-ranging measures to reduce our costs.
“Our players, senior football staff and executive team have volunteered pay cuts, we have stopped pretty much all of our capital spending, and our discretionary operating expenditure has been strictly controlled.
“We have also received significant financial support from our owners, Kroenke, Sports & Entertainment, in terms of refinancing our stadium debt.”
In recent weeks both Gabriel Martinelli and Bukayo Saka have been handed new contracts and Arsenal are currently hoping to persuade captain Pierre-Emerick Aubameyang to sign a new £250,000-a-week deal in the imminent future.
Wednesday’s announcement over redundancies – with the majority of cuts to be made in commercial and administration roles – will not halt investment in the team this summer, both in terms of contract renewals and transfer fees, as there is an acceptance that the team needs to improve for the club to be financially secure.
Arsenal announced in April that the majority of the first-team squad had agreed to a 12.5% wage cut to help the club through the pandemic. That cut will now be reduced to 7.5% for the coming season after Saturday’s FA Cup win secured qualification for the Europa League.