Two major employers in the UK’s hospitality sector announced thousands of proposed job losses between them, hours before Boris Johnson outlined new restrictions to tackle rising COVID-19 infection rates.
The owner of the Premier Inn chain of hotels and Brewers Fayre restaurants, Whitbread, said it planned to shed up to 6,000 staff but hoped the majority of the planned losses could be made voluntarily.
Hours later, JD Wetherspoon said 450 pub jobs were at risk to account for a « downturn in trade » at six airports – Gatwick, Heathrow, Stansted, Birmingham, Edinburgh and Glasgow.
The companies outlined their plans as the wider hospitality sector faces up to the new COVID-19 curbs which included curfews on pubs and restaurants.
Wetherspoon chairman, Tim Martin, used an interview with Sky News to describe the plans as « nuts », warning that it would cost more jobs across the sector.
He told Ian King Live the economy was being « ruined fast » by a government that did not understand money.
Whitbread outlined the extent of the damage to its sales during the coronavirus crisis – down by almost 80% during the first half of its financial year to 27 August as a result of the lockdown that forced the closure of most sites.
Watch and follow live on Sky News as Boris Johnson gives a Downing Street address at 8pm
It said the accommodation division was performing ahead of the market since re-opening while its restaurant brands were « boosted by the positive impact of the Eat Out To Help Out scheme ».
It also cited the looming conclusion to the Job Retention Scheme – due to be wound down completely at the end of next month despite a chorus of disapproval from opposition parties, unions and business leaders who are demanding further targeted support.
Whitbread said of its plans: « These changes create a more flexible labour model that can adapt with changes in the demand environment going forward. Our priority is to ensure that the process is fair and that impacted colleagues are supported throughout ».
It said the job cuts – representing 18% of its workforce – would be on top of cost-cutting measures that would lead to its head office headcount being reduced by up to 20%.
Its other actions have included the suspension of its dividend and voluntary pay cuts for its board and management team.
Shares – which have lost half their value in the year to date – fell by 3%.
Chief executive, Alison Brittain, said: « Our teams have worked very hard to reopen our hotels and restaurants and we are now firmly in the « restore » phase of our response to the COVID-19 crisis.
« Our performance following the reopenings has been ahead of the market, however, it has been clear from the beginning of this crisis that even as restrictions are eased and hospitality businesses such as ours reopen their doors, that demand would be materially lower than FY20 levels for a period of time.
« Given this backdrop, we have already taken extensive action to protect the business, retain financial flexibility and position it for long-term success. »
Commenting on the job cuts, Hargreaves Lansdown equity analyst Emilie Stevens said: « This is unfortunately a reflection that coronavirus may have changed Whitbread’s world for good, without full hotels the group isn’t profitable, so a lower and more flexible cost base is essential. »
© 2020 Sky UK
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