The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs in the UK after suffering heavy losses during the coronavirus crisis lockdown.
SSP Group said the cuts, equal to half of its 9,000-member workforce in Britain, were focused on the UK because the economy and travel industry had been slower to bounce back from the pandemic.
The company, which operates in 35 countries, said other parts of the business would largely avoid sweeping job cuts and restructuring “due to our expectations of a more rapid recovery, the longer durations of furlough support or our contractual layoff arrangements”.
The cutbacks follow a dramatic fall in domestic and international travel, which has hit the company’s sites at railway stations and airports. Almost all of its UK outlets closed during the lockdown.
SSP’s chief executive, Simon Smith, said Covid-19 was having an unprecedented impact on the business and while there were early signs of recovery in some parts of the world, the UK had been slow to bounce back.
He said the cuts would ensure the company survived the pandemic. “We are now taking further action to protect the business and create the right base from which to rebuild our operations,” Smith said.
“We have therefore come to the very difficult conclusion that we will need to simplify and reshape our UK business, and we are now starting a collective consultation on a proposed reorganisation.”
The food and drinks company has an extensive business. Apart from its Upper Crust and Caffè Ritazza brands, it operates bespoke food outlets, as well as hundreds of of Starbucks, Burger King and Jamie Oliver sites at airports and railway stations across the world.
SSP, which has put a number of workers on furlough, said it had originally planned to reopen its sites and bring staff back to work as quickly as possible once passenger demand had recovered.
Sales in April and May were down 95% compared with a year earlier but even after some restrictions lifted in continental Europe and North America, June sales were 90% lower than the same month in 2019.
“The reality is that passenger numbers still remain at very low levels,” SSP said. UK rail passenger numbers are 85% lower year on year, while UK air travel has been largely non-existent, it added.
Smith said the company would be able to increase operations and reopen additional sites if sales improved over the summer.
However, even with the introduction of “air bridges” between countries and the start of the summer holiday season, the company expects only 20% of its UK sites to have reopened by the autumn.
SSP said it had already taken action to preserve cash during the Covid-19 lockdown, including suspending its share-buyback programme, slashing spending and investment, and cutting pay for for executives, board members and senior managers by about 30% until at least September.
The news continues a grim week of job losses across the travel industry. On Tuesday, the plane maker Airbus announced plans to axe up to 15,000 jobs – including 1,700 in the UK. EasyJet said it was planning to cut up to 727 pilot jobs and up to 1,200 cabin crew posts across the UK and close its bases at Stansted, Southend and Newcastle airports.
Retailers have also taken a hit. The furniture chain Harveys and the shirt maker TM Lewin have called in administrators, resulting in the immediate loss of more than 800 jobs, with more than 1,300 others at risk.