December 9, 2014 / 8:41 PM / in 3 years

UK start-up Truphone gets 51 mln pounds in new funding; cuts jobs

3 Min Read

LONDON, Dec 9 (Reuters) - British telecoms company Truphone said on Tuesday it will get 51 million pounds ($80 million) in new financing from existing backers including Russian steel magnate Alexander Abramov but will also cut roughly a quarter of its existing workforce.

The company has been looking for a way to staunch mounting annual losses, which widened to 91.5 million pounds in 2013, compared with a 34.4 million pound loss the previous year, as it has pursued aggressive international expansion .

The cuts come several months after the London-based company embarked on a major expansion of its services which will offer a fixed-rate calling plan for business travellers in 66 countries.

It also has introduced personalised calling numbers in eight countries - Australia, Germany, Hong Kong, Poland, Spain, The Netherlands, Britain and the United States - which effectively allow travellers to make calls at local rates when they enter those markets.

Truphone said it had entered into consultations to cut its headcount by "at least a couple hundred". In October, it employed between 700 and 800 staff.

"There is no question we are going to burn less cash than we previously did," Truphone Chief Executive Steve Robertson said in a phone interview. "We are going to need less people."

"However, it has become clear that, while Truphone continues to grow quarter on quarter, we must accelerate our progress towards profitability," Robertson said.

He said his company remained committed to maintaining the same levels of phone service and network quality in spite of the planned cutbacks and will be considering expanding into new countries next year.

"We are still expecting to treble the size of the business," Robertson said. "This isn't a policy where we are going to retrench the business."

Truphone had received in excess of 300 million pounds of investment over its eight years in business, excluding the latest round of financing.

In early, 2013, it received 75 million pounds from Abramov, making him major owner of the company. He was joined by fellow billionaire, former Evraz business partner and current Chelsea football club owner Roman Abramovich.

Abramov declined to comment. ($1 = 0.6385 pounds) (Editing by Jane Merriman and Susan Thomas)

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