UK leisure group Whitbread may cut nearly 6,000 jobs

The company said the potential job cuts represent 18 per cent of its total workforce.
The company said the potential job cuts represent 18 per cent of its total workforce.PHOTO: REUTERS

LONDON (AFP) - British leisure group Whitbread, owner of Premier Inn hotels, announced on Tuesday (Sept 22) that it could axe up to 6,000 jobs and blamed "subdued" travel demand during the coronavirus pandemic.

Whitbread, which also owns restaurants including Brewers Fayre and Beefeater, said it will consult on the cutbacks that would amount to almost a fifth of its workforce.

"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," said chief executive Alison Brittain in a statement.

The London-listed leisure firm said that it expected a "significant proportion" of the redundancies would be on a voluntary basis.

Britain reopened its hospitality sector in July, after a months-long nationwide lockdown that began on March 23.

The UK government also launched stimulus package for the troubled industry, including a restaurant discount scheme - entitled 'Eat Out to Help Out' - and a cut in value-added tax (VAT).

However, the government will later on Tuesday unveil new restrictions to curb rising coronavirus cases across England and prevent a deadly second wave.

Under new rules due to come into force on Thursday, English pubs, bars and other hospitality venues will be required to close at 2100 GMT, while food and drink outlets will be restricted to table service only.

Whitbread stressed that its staff had worked "very hard" to reopen the group from lockdown.

"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," Brittain said.

The group's performance following the reopenings "has been ahead of the market," she said.


However, it had been clear from the beginning of the crisis that even as restrictions were eased and hospitality businesses reopened, demand would be "materially lower than 2020 levels for a period of time," Brittain said.

"Given this backdrop, we have already taken extensive action to protect the business, retain financial flexibility and position it for long-term success. We continue to work hard to ensure that we emerge from the crisis with a more flexible operating model and a stronger, more resilient business," the CEO said.

The "Eat Out to Help Out" scheme - which was valid Monday to Wednesday throughout August - saw the UK government contribute 50 percent of the cost of a cafe, restaurant or pub meal, up to £10 ($13, 11 euros) per person.

Britons enjoyed more than 100 million meals under the discount scheme, according to recent data.