Coronavirus: Premier Inn owner Whitbread to cut 6,000 jobs | Business News

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Two major employers in the UK’s hospitality sector have announced thousands of proposed job losses between them, hours before the government is to outline 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.


Just 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.

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JD Wetherspoon says weak travel demand means its airport outlets are suffering

That was on top of up to 130 head office cuts previously disclosed.

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.

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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 said August UK total sales improved to be 38.5% down year-on-year.

Whitbread said its job cut proposals reflected forecasts of continuing subdued demand, as England faces up to new curbs due to be outlined by Boris Johnson later on Tuesday.

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 says the coffee shop market in China is 'highly attractive'
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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. 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%.



Staff clean chips with antibacterial wipes at The Rialto casino in central London as they prepare for reopening at midnight as coronavirus lockdown measures continue to be eased in England. PA Photo. Picture date: Friday August 14, 2020. See PA story POLITICS Coronavirus. Photo credit should read: Kirsty O'Connor/PA Wire



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Its other actions have included the suspension of its dividend and voluntary pay cuts for its board and management team.

The company completed a £1bn rights issue in June to bolster its cash pile.

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.”


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