Upper Crust owner SSP has announced up to 5,000 job cuts as it attempts to survive a sector-wide coronavirus downturn in the travel industry.
The job cuts will largely affect SSP’s UK head office and UK operations, the company said today, at a cost of between £8m and £10m.
SSP said coronavirus has forced it to find cost savings as travel bans and UK-wide lockdowns led to a severe drop in revenue.
Rail passenger traffic has fallen 85 per cent year on year, while demand for flights remains incredibly low, the company said.
It now predicts just 20 per cent of its train station and airport Upper Crust stores will reopen by the autumn, leading it to “simplify and reshape our UK business”.
“We are now starting a collective consultation on a proposed reorganisation,” SSP said.
“If the pace of the recovery continues at the current level, this could lead to up to c. 5,000 roles becoming redundant from within the head office and UK operations. Clearly, these decisions are very difficult, and our priority is to conduct this process fairly and to support those affected.”
SSP said it had planned to reopen stores as quickly as possible and rapidly take staff off the government’s furlough scheme as passenger demand returned.
But it said today: “The reality is that passenger numbers still remain at very low levels, a reflection of the extent and duration of the current restrictions in place.”
Shares fell 2.24 per cent in early trading to 251p as investors reacted to the job cuts.
The Upper Crust owner said proposed so-called air bridges with other countries in time for summer holidays could boost short-term demand in July.
But it expects capacity to be severely limited, with little interest in long flights.
Group CEO Simon Smith said: “We are beginning to see early signs of recovery in some parts of the world and are starting to open units as passenger demand picks up.
“However, in the UK the pace of the recovery continues to be slow. In response to this, we are now taking further action to protect the business and create the right base from which to rebuild our operations. Regrettably, we are starting a collective consultation which will affect our UK colleagues.
“These are extremely difficult decisions, and our main priority will be to conduct the process carefully and fairly. Importantly, we are retaining the flexibility to upscale operations and swiftly re-open additional units if we see improved sales over the summer.”
Prior to the coronavirus outbreak, SSP employed 40,000 staff in operations across 35 countries.
Today’s job cuts announcement will affect UK employees only. SSP has an empire of around 570 stores in railways and airports across the UK. But under 10 of those are currently open.