22 September 2020 22:33
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.
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. 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". Whitbread said its job cut proposals reflected forecasts of continuing subdued demand. 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. Image: Whitbread completed the sale of Costa Coffee to Coca-Cola last year for £2.5bn Whitbread said of its plans: "These changes create a more flexible labour model that can adapt with changes in the demand environment going forward.
Most cuts will be in its hotel arm, with a significant proportion expected to be voluntary redundancies. The firm said: "This is a regrettable but necessary step to ensure that we emerge from the crisis with a lower cost base, a more flexible operating model and a stronger more resilient business." Chief executive Alison Brittain said the end of the taxpayer-funded furlough scheme on Oct 31 will be "a significant moment" for the company, forcing it to pick up the full wage bill for all workers. London (CNN Business) The owner of Britain's biggest hotel chain on Tuesday unveiled plans to slash up to 6,000 jobs just days before the UK government begins enforcing new restrictions on pubs and restaurants to contain rising coronavirus infections. Whitbread, the owner of Premier Inn hotels and Beefeater restaurants, said in a statement that the layoffs could affect up to 18% of its workforce. "This is a regrettable but necessary step to ensure that we emerge from the crisis with a lower cost base, a more flexible operating model and a stronger more resilient business," it said.
The job losses also come on top of cuts to reduce its head office workforce by up to a fifth, impacting around 150 jobs. Alison Brittain, chief executive of Whitbread, said: "With demand for travel remaining subdued, we are now having to make some very difficult decisions, and it is with great regret that today we are announcing our intention to enter into a consultation process that could result in up to 6,000 redundancies in the UK, of which it is hoped that a significant proportion can be achieved voluntarily." Whitbread expects the jobs to go by the end of the year. But it said the vast majority of its 900 hotels and 350 restaurants would remain open. It came as Whitbread revealed like-for-like sales crashed 77.6 per cent in the six months to August 27 after the coronavirus lockdown forced the closure of its estate. The group said hotel sales growth has been strong since reopening, with those in UK seaside and tourist locations almost 80 per cent full in August as more Britons staycationed due to travel fears amid the pandemic. But demand in London and other city centres remained under pressure, with total occupancy levels at 51 per cent on average last month and sales still 47.3 per cent lower. The Government's popular Eat Out to Help Out discount scheme in August helped boost its eateries, with the decline in total hotel and restaurant sales narrowing to 38.5 per cent last month. Trading in the first two months of September remained ahead of the wider market, according to the group, with bookings in tourist destinations still strong. Whitbread flagged the increased restrictions by the Government to clamp down on a second wave of the pandemic and said it will "continue to closely monitor the situation". Ms Brittain said: "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 full year 2020 levels for a period of time." The company pointed to the end of the government's furlough scheme as a reason for the cuts. Whitbread (WTB.L), the owner of budget hotel chain Premier Inn, said on Tuesday that it is considering cutting nearly 6,000 jobs in its hotel and restaurant business as the coronavirus pandemic continues to weigh on demand. The group added in its trading update that the potential job cuts, which represent 18% of its total workforce, is to help mitigate the effects of lower demand from consumers over the short and medium term and that a large amount of the layoffs are expected to be voluntary. "With demand for travel remaining subdued, we are now having to make some very difficult decisions, and it is with great regret that today we are announcing our intention to enter into a consultation process that could result in up to 6,000 redundancies in the UK, of which it is hoped that a significant proportion can be achieved voluntarily," said Alison Brittain, CEO of Whitbread. Premier Inn owner Whitbread to cut 6,000 jobs The group said in its statement that the job cuts were part of "quick and decisive action to protect the business and to position it for long-term success" and that it is "close to completing a process that will result in a reduction of our head office headcount by approximately 15%-20%." UK employers have slashed 695,000 jobs since March when the coronavirus first sent Britain into national lockdown. Britain's official unemployment rate also increased, as expected by analysts, to 4.1% between May and July, from 3.9% a month earlier, according to new data from the Office for National Statistics (ONS) published on Tuesday. READ MORE: UK employers have cut 695,000 jobs since March as unemployment rate rises The government furlough scheme was intended to help keep employers from sacking staff, by subsidising up to 80% of their wages on the promise that it would not lay off staff. However, the scheme comes to an end in October and many employers have warned that it needs to be extended to save jobs. "In line with previous announcements, we expect demand to remain subdued in the short to medium-term and the UK Government's furlough scheme to come to an end in October," said Whitbred in its statement on Tuesday. "We have taken the very difficult decision to announce our intention to enter into consultation with our UK hotel and restaurant colleagues on proposals that could result in up to 6,000 redundancies, of which it is hoped that a significant proportion can be achieved voluntarily, along with reductions in contracted hours for a proportion of our colleagues. "These changes create a more flexible labour model that can adapt with changes in the demand environment going forward.