Sir Jim Ratcliffe believes his decision to cut about 200 more jobs at Manchester United is necessary to help the club avoid going bust, the Guardian understands.
The minority owner is said to feel he has little choice other than to take tough measures after United lost £300m over the past three years but is confident that acting now can lead to the club being profitable and highly competitive in two years’ time.
Related: Red flags raised after debts soar at Sir Jim Ratcliffe’s chemicals empire
United insiders have told the Guardian that the club would have run out of cash without the $300m (£240m) Ratcliffe injected last year. The final $100m was paid in December and raised his shareholding to 27.7%. It is understood United’s cash reserves would have run dangerously low without that.
This difficult financial position is the reason why the Glazers, the majority owners, announced a strategic review in November 2022. A club statement at the time said: “As part of this process, the board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the company.”
This led to Ratcliffe’s purchase of a share in United and he has driven a series of measures to bring down costs. Last summer and autumn he made about 250 employees redundant and he is driving the plan for this round of about 200 job losses.
Ratcliffe, the founder and chairman of the petrochemicals firm Ineos, understands his decisions are unpopular but feels there a lack of awareness outside the club regarding the full picture of United’s situation.
The balance sheet is severely stressed because of what some United insiders regard as years of poor financial management but Ratcliffe is optimistic that if these painful measures are taken, United will be in secure financial health in about two years.
Other United insiders dismissed fears the club could go bust and said the narrative was being used by Ratcliffe to concentrate minds and underline that the club is facing genuine financial challenges.
Moves to reduce costs and restructure are designed to make United strong, financially stable and able to compete again at the top of English and European football. The ambition is to invest in improved facilities for players and supporters.
Additional cost-reducing measures taken by Ratcliffe include ending Sir Alex Ferguson’s ambassadorial role despite the Scot being United’s most successful manager during a 26-and-a-half-year tenure. He was paid about £2m annually.
Bryan Robson, Andy Cole and Denis Irwin, prominent players under Ferguson, will reportedly have their salaries as ambassadors lowered, and Jackie Kay, the head of team logistics and an employee for three decades, is set to lose her job.
Ratcliffe is also thought to have ended the annual £100 Christmas bonus to administrative staff, replacing this with a £40 voucher from Marks & Spencer.
United could afford only the £25.1m outlay to buy Patrick Dorgu from Lecce and about £1.5m spent to bring in Ayden Heaven from Arsenal during the winter transfer window and face a difficult summer window because of limited finances, with the ability to considerably strengthen Ruben Amorim’s squad dependent on accruing a profit from player sales.
The club was approached for comment.
