Cattles plans to close 30 of its Welcome branches and introduce redundancies.

Cattles has announced potential redundancies for 510 of its Welcome Financial Services (Welcome) staff, and the proposed closure of 30 of its 183 branches.

The branch closures will affect those offices where leases have expired, or are due to expire, and the proposals aim to make the business more cost-efficient in light of the lower lender levels.

The group has experienced serious financial issues this year, after revealing £700 million of bad debt. In January, the company announced it would reduce Welcome’s new business volumes by 75% and cut around 1,000 jobs within the group.

Margaret Young, Executive Chairman of Cattles, said: “These proposed changes are central to Cattles achieving a more cost efficient business model which mirrors current levels of lending activity. Cattles is still in constructive discussions with its key financial creditors to obtain a standstill agreement.”

Those potentially affected by redundancy will receive a letter from the company today, which will begin the consultation process.

Cattles provides a service to people who do not have access to mainstream credit facilities, and through lending with the group they are able to rebuild their credit history. Its companies include Welcome, Cattles Invoice Finance, and The Lewis Group.

Welcome is the biggest of the three, achieving 95% of the group’s revenue. It provides direct repayment loans – totalling £1.4 billion in 2007 – and home collected loans.