Yahoo Finance Coronavirus: Caffe Ritazza and Upper Crust owner may axe up to 5,000 jobs
The owner of Upper Crust and Caffe Ritazza has announced up to 5,000 jobs could be axed in the UK due to a slow recovery in demand despite lockdown measures easing.
SSP Group (SSPG.L), which has around 2,800 food and drink branches at airports, train and service stations in Britain and around the world, announced the cuts to staffing on Wednesday.
It said it had hoped to reopen its branches and bring staff back to work from furlough once passenger demand for travel recovered. But it warned that it now expected only around a fifth of its units to have opened by the autumn.
“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,” it said in a statement.
“If the pace of the recovery continues at the current level, this could lead to up to [circa] 5,000 roles becoming redundant from within the head office and UK operations.”
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The company said passenger numbers on UK trains were down 85% on a year ago, while even air bridges would still mean “significantly reduced” capacity on flights and long-haul demand is likely to remain weak.
SSP 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.
“These are extremely difficult decisions, and our main priority will be to conduct the process carefully and fairly.”
But he added that the company was “retaining the flexibility” to swiftly reopen more units if it saw improved sales over the summer.
The company said it had not taken similar measures in any other countries on a “material scale.” It highlighted “expectations of a more rapid recovery, the longer durations of furlough support or our contractual lay-off arrangements.”
The announcement comes amid increased scrutiny of the UK government’s economic policy. It is winding down its wage subsidies despite warnings it could trigger mass redundancies, and is expected to announce new recovery stimulus measures next week
SSP shares were trading around 4% lower after the announcement in early trading in London.
