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Is the INEOS austerity policy at United justified or damaging?

To mark INEOS’ first anniversary of operating United, The Athletic has spoken to numerous sources within the club’s ecosystem, all of whom spoke confidentially to protect their jobs, to detail what measures have been taken at the club and with the men’s first team.

Among much more, The Athletic reveals:

  • A fear of further job cuts
  • Approvals to sign off anything costing £25,000 or more go above Berrada
  • Ratcliffe proposed X owner Elon Musk or Amazon’s executive chairman Jeff Bezos help pay for new stadium
  • Club looking at significant ticket price rises
  • Further ambassador cuts and high-profile exits, including former chief executive David Gill’s £1million-per-year retainer
  • More INEOS executives getting involved at United on a day-to-day basis

Ratcliffe resented the fact United are a loss-making enterprise, in the red for over £113n n the last financial year.  While the initial deal agreed Ratcliffe would assume sporting control of United, it quickly became clear he needed to get a grip of the business to address matters on the pitch. His scope therefore expanded.

United are one of the most profitable clubs in the world before player trading and interest payments on debt come into the equation — a legacy of Glazer ownership — but a key objective for Ratcliffe has been headcount reduction, down from around 1,000 to 750. Those large-scale redundancies have left morale, in the words of several employees, “on the floor”. Others at the club would counteract that view, insisting that people understand what Ratcliffe is trying to do and why. 

In that light, some staff at United are making contingency plans and looking at opportunities elsewhere. For instance, the commercial director at a different north-west football club is sitting on around a dozen applications from current United employees.

People who have worked with Ratcliffe consider staffing levels an obsession, with the 72-year-old applying to United the business strategies that have helped him become one of Britain’s richest men. Stripping back companies to increase efficiencies has been his blueprint but former colleagues feel the same approach might not work at United because they think football is different.

The start of December used to be the time the rank-and-file could look forward to the office Christmas party. But the hierarchy at United, led by Ratcliffe, put paid to that this time round.   Cutting the Christmas party caused widespread upset because it would have been a chance to mix with colleagues in a relaxed environment and have some fun at the end of a year when many had given up evenings and weekends to work. 

It is estimated United saved around £250,000 by cancelling the Christmas function, but those at the club say the call was made in light of so many people losing their jobs, and celebrating in those circumstances would have been wrong, rather than it being a financial calculation.

Staff being able to let their hair down when away, or wine and dine clients, was seen by the Glazers as a fair expense and the club’s sponsorship business was industry-leading, but Ratcliffe viewed it differently. He withdrew corporate credit cards and enforced much tighter spending, to the point where staff now have to plot train journeys using the split-ticket mechanism for lower-cost fares.

One particularly embarrassing moment came during pre-season when a meal out for staff and players ran into thousands of dollars and senior executives, due to new credit card limits, found their cards blocked initially when attempting to pay. They ended up splitting across multiple cards to cover the bill.

A clear point of conflict comes over what happens with Old Trafford. Ratcliffe appears determined to build a new stadium, when Joel had previously shown preference — although little momentum — to redevelop. How to finance a ground from scratch, at a cost upwards of £2billion, has not been sufficiently explained.

A fan commented: ‘For argument's sake, let us assume that Utd indeed were overstaffed and needed to make cuts. It also makes sense for the club to try and curtail executive and commercial spending, such as nights out in Vegas. While studies have consistently shown there is no real drop-off when companies allow sensible work-from-home policies, there's a traditional assumption that people have to work in an office to be at their best. I am not surprised to see Ratcliffe issue that call as well.

It does, however, get a little bemusing when the club is asked why there's no office Christmas party, and the stated reason was that 250 people had been let go and people wouldn't want to celebrate, when it was INEOs who created the conditions for both in the first place!’

My view is that there was some fat to be cut, but it has been pushed too far and is damaging the morale of key staff.

 

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