Whitbread, which owns Premier Inn and Beefeater, has warned that 6,000 staff could lose their jobs.
The company blamed the cuts on a slump in hotel guest numbers since lockdown. It comes as the government’s furlough scheme, which still pays 27,000 Whitbread staff, ends next month, reports BBC.
Whitbread said hotel stays in August had halved and diner numbers fell by more than a third, though said it had been helped by the Eat Out to Help Out scheme.
The company could also be affected by new rules forcing restaurants to shut at 22:00. From Thursday, hospitality venues will have to close earlier to help curb the spread of the coronavirus.
Whitbread said it expected demand to remain lower well into 2021 and possibly 2022.
Whitbread boss Alison Brittain said the company was hoping to avoid compulsory redundancies.
She 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.”
Around three quarters of Whitbread’s 35,000 staff are still paid in part through the government’s furlough scheme.
Since July, furloughed employees have been able to go back to work part-time, with the furlough scheme covering the other three days not worked. Meanwhile, employers now have to pay 10% of the wages of furloughed workers, plus their National Insurance and pension contributions.
But that comes to an end on 31 October, shortly before the Whitbread’s 45-day consultation period will be completed for workers put on notice of redundancy.
The firm said it had taken the decision in the face of subdued demand, noting that it would stop receiving help with staff wages at the end of next month.
Whitbread said it had lost more than three quarters of its sales in the first half the year when hotels and restaurants were forced to close because of the virus.
Since then it said demand for hotel rooms had been “strong” in tourist hotspots but London and other metropolitan areas had been less popular.
The expected job losses, which account for around a fifth of Whitbread’s workforce, follow cuts to the company’s head office staff, which affected around 150 people.
Shares in the company lost around 2.5% of their value shortly after markets opened in London.
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