Up to 200 jobs are to be lost at Gala Coral Group, the private equity-backed gambling operator, as Dominic Harrison, who took over last month as chief executive, streamlines its structure.

An industry source said that a consultation process was being instituted that involves about 1 per cent of the group's 20,000 workforce, although it is understood that the number of job losses is likely to be below that number.

Gala comprises five divisions - bingo, casinos, Coral the bookmaker, international and e-commerce - which will be reorganised into gaming, retail betting (including overseas shops) and remote gambling. A source close to the company said that the simplified structure was designed to “help to knit the company together better at a time of uniquely difficult economic conditions”. It is understood that the changes will create significant cost savings, although the source said that it was too early to quantify them.

In the spring, the company's private equity backers — Candover, Cinven and Permira — injected £125 million of new equity into the business to relieve pressure on its banking covenants. They also wrote down the value of their investments by about 50 per cent, implying a fall in its equity value from £1.35 billion to about £675 million.

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