Wonga to slash third of workforce in £25m cost-cutting drive and stop small business lending

Controversial payday lender Wonga has announced it will slash a third of its workforce in a cost-cutting measure.

Some 325 jobs are set to be lost as a massive regulatory crackdown on the industry has made the major players on the market tighten their purse strings.

In 2014, the Financial Conduct Authority (FCA) introduced measures that ensured consumers will never have to pay back more than double what they originally borrowed from payday lenders, who typically charge astronomical interest rates.

As a result of the new guidelines, which includes a host of other rules to protect the consumer, Wonga is looking to cut costs of £25m (€34m, $39m) over the next two years.

Wonga stated its offices in London, Dublin, Cape Town and Tel Aviv would all lose staff. It also said it will stop lending to small businesses.

In more restrictions enforced upon payday lenders, the Competition and Markets Authority announced earlier on 24 February that lenders must make their products available on at least one price comparison website to foster a better deal for consumers.

The CMA envisages regulated price comparison sites, which will provide comparable information on all potential loan costs, in particular the total amount payable, have the ability for customers to compare different loans by searching easily on the most relevant features such as loan amount and duration.