Costa Coffee has announced plans to cut up to 1,650 jobs in response to the COVID-19 crisis, the latest sign of the impact of COVID-19 on the hospitality sector.
Costa said in a statement on Thursday it would “streamline” its operations in response to the “high levels of uncertainty as to when trade will recover to pre-COVID levels.”
As a result, 1,650 staff are at risk of redundancy. The cuts amount to just over 10% of Costa’s entire workforce.
“Today’s announcement to our store teams was an extremely difficult decision to make,” Costa’s UK and Ireland managing director Neil Lake said in a statement.
“Our baristas are the heart of the Costa business and I am truly sorry that many now face uncertainty following today’s news.”
Lake thanked staff and said they would be supported through the redundancy process. He said the cuts were necessary “to protect the business and ensure we safeguard as many jobs as possible.”
The announcement comes just a week after rival coffee and sandwich chain Pret A Manger announced plans to cut 2,800 jobs and close 30 shops. Pret said the pandemic had pushed sales to the lowest level in a decade.
Pret’s announcement is said to have prompted alarm within government, amid fears that inner city economies could be devastated by the rise in home working. The government this week launched a push to get people back in their offices in response.
Founded by a pair of Italian brothers in London in 1971, Costa has over 2,700 coffee shops across the UK and Ireland, as well as 1,700 in 30 other countries around the world. Coca-Cola (KO) bought Costa from the UK’s Whitbread in 2018 for $5.1bn (£3.8bn).
“As a proud member of the UK high street, we remain committed to the role Costa plays in supporting the economic recovery of the country,” Lake said.