David Brent, manager of the Slough branch of Wernham Hogg paper merchants, is told that it might be closed down. He makes the rash promise of `no redundancies'.

Donna, on work experience, has her first day dominated by a rude picture of her boss that has been e-mailed around the office. David fails to appreciate the joke and puts Gareth on the case.

It's Tim's 30th birthday and he receives a card from Dawn and an unusual gift from Lee. Brent and Finchy take on Tim and Ricky at the annual quiz night, but things get ugly.

To fend off the increasing staff disillusionment, a training day has been scheduled. Dawn's engagement to Lee is on the rocks and Tim begins to think that he may at last have a chance with her.

David interviews for a new secretary and chooses blonde Karen. Meanwhile, Donna's late arrival at work inevitably sparks the rumour that she is sleeping with a colleague.

Brent hears that the Slough branch is to be merged. Though there will be job losses, his position is safe, and he needs to keep his team on board.