Tuesday 22 September 2020 7:39 am

Coronavirus: Premier Inn owner Whitbread to axe up to 6,000 jobs

The owner of hotel chain Premier Inn has announced plans to cut up to 6,000 jobs as the coronavirus outbreak continues to ravage the hospitality industry.

Whitbread, which also owns the Beefeater and Brewers Fayre restaurant chains, said the figure represents 18 per cent of its total workforce.

Read more: Premier Inn owner Whitbread sees tourist demand as hotels reopen

The FTSE 100-listed firm said the cuts were 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 came as Whitbread reported a collapse in sales for the first half of the year due to the closure of the majority of its hotels and restaurants.

Total sales for the group in the UK and abroad plunged almost 77 per cent in the 26 weeks to 27 August.

Whitbread said 98 per cent of its venues had reopened since the end of the first half and reported better-than-expected accommodation sales.

The group also benefited from the government’s Eat Out to Help Out scheme.

But Whitbread said it expected demand to remain subdued in the short to medium term and warned of the impact of the end of the government’s furlough scheme in October.

It is also facing continued uncertainty over local coronavirus lockdowns and the new 10pm closing time for pubs and restaurants across the UK.

Shares in Whitbread fell 2.65 per cent in early trading.

Whitbread said it hoped many of the redundancies — which will incur a one-off cost of between £12m and £15m — would be taken voluntarily.

Read more: Premier Inn owner Whitbread taps investors for £1bn

“With demand for travel remaining subdued, we are now having to make some very difficult decisions,” said chief executive Alison Brittain.

“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.”