Online retail giant THG has cut its headcount by around 40 per cent in the last three years.
CEO and founder Matt Moulding has revealed the combination of reducing the firm鈥檚 global workforce from around 10,200 to 6,300 in the three years to 2024, and cutting back on capex, has saved THG more than 拢200m annually.
The 53-year-old said by reinvesting the savings back in the business, THG was perfectly placed to capitalise on the demerger of Ingenuity and a rebrand of Myprotein.
Writing on LinkedIn for the first time in more than a month, Moulding admitted: 鈥淭o say 2024 was a year of change at THG is a hideous understatement.
鈥淭he shocks to the global economy that started in early 2022, hot on the heels of Covid, meant most businesses had to quickly adapt 鈥� THG was no different.
鈥淲ith each new shock came new implications.聽We pulled apart THG鈥檚 business models, turned them upside down and rebuilt them again.
鈥淭his process has seen us exit various businesses/markets – from entertainment to luxury apparel, and even some smaller beauty brands. We鈥檝e restructured global operations/offices and doubled down on investment in robots and AI.
鈥淎ll this allowed us to carefully reduce our global headcount over the past three years from c10,200 to 6,300 by the end of 2024, saving THG well over c拢200m a year – serious money.
鈥淪o what are we doing with the savings? Firstly, we鈥檝e reinvested in our people. Like most businesses. THG鈥檚 average salaries have risen sharply since Covid: up +40 per cent to c拢51,000. Add on taxes/benefits and this rises to 拢61,000 per employee. This costs THG over 拢100m each year.鈥�
Last month THG rejected a bid worth 拢400-600m from former director Iain McDonald for its Myprotein brand and Moulding opened up about some of the challenges they the brand has faced.
鈥淎fter 18 months of planning, we launched a major global rebranding of Myprotein at the start of 2024, positioning the brand for an assault on the offline market,鈥� he wrote.
鈥�2023 was a record year for Myprotein but 2024 was quickly met by a monumental spike in commodity prices 鈥� especially in whey protein. This reduced Myprotein鈥檚 gross margins by almost c拢50m in 2024 鈥� another chunk of our savings temporarily used up.
鈥淎nd finally, we鈥檝e been reinvesting cost savings back into the customer, minimising price rises across all our businesses, building market share and customer loyalty.
鈥淎ll this led to THG delivering FY 2024 revenues of 拢1.9bn and underlying profits of 拢123.1m, both slightly ahead of 2023. Without the initiatives of the last three years the numbers would have been very different.
鈥淎fter a tough year of change across Myprotein, it鈥檚 a relief to see a much-improved start to 2025. Last year鈥檚 global rebrand is now paying dividends. Myprotein is back in growth, growing momentum each month, with offline sales proving especially successful.
鈥淏ut despite all the above, the demerger of THG Ingenuity at the start of 2025 was by far the biggest initiative we鈥檝e ever undertaken.
鈥淚ngenuity had its own extensive and disruptive model overhaul in 2023/24, before leaving THG. At the end of 2024 a small army of retail investors agreed to join me in taking ingenuity private.
鈥淭HG Ingenuity had a great Q1, largely driven by progress within our robotics and fulfilment division. Several material contract wins have underpinned confidence to build out more robotic centres in other locations, while also expanding existing sites.
鈥淭his positive start to 2025 puts Ingenuity well on track to deliver Revenues of c$900m and underlying profits of c$60m, with capex down to c$70m versus $121m in 2024.鈥�