- Whitbread expresses plans of slashing its workforce by 6,000 jobs.
- The British company predicts the layoff to cost up to £15 million.
- The Premier Inn owner's sales plunge 76.8% in the fiscal first half.
Whitbread plc (LON: WTB) expressed plans of slashing its workforce by 6 thousand jobs on Tuesday due to the Coronavirus pandemic that continues to weigh on the global travel and hospitality sector. The announcement comes just when the state-backed job support scheme is coming to an end.
Shares of the company were reported trading about 4% down in premarket trading on Tuesday. On market open, Whitbread gained 1% and is now exchanging hands at £20.40 per share versus a low of £18.08 per share in March when COVID-19 brought travel and tourism to a near halt. Trading stocks online is easier than you think. Here’s how you can buy shares online in 2020.
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Whitbread predicts the layoff to cost up to £15 million
Premier Inn owner said that formal consultations for the planned job cut had already started. It will affect about 18% of its workforce but the majority it, as per Whitbread, will be implemented in the form of voluntary layoffs. The British company predicts costs related to the layoffs to lie in the range of £12 million to £15 million.
Travel and hospitality businesses have taken the worst hit due to the COVID-19 crisis that has so far cancelled billions of dollars worth of holidays and business trips in 2020. The Anglo-German multinational travel and tourism company, TUI also said on Tuesday that it reduced capacity for the coming winter. It also said that it will continue to explore funding options to cushion the economic blow from the ongoing health crisis.
Whitbread’s sales plunge 76.8% in the fiscal first half
Since COVID-19 cases are beginning to rise again in the country, the UK based pubs and restaurants are likely to face another round of restrictions in the upcoming months. In a report published in the first week of July, Whitbread had revealed a massive 80% decline in sales in its last quarter.
In the fiscal first half that concluded on 27th August, Whitbread said that its total sales came in 76.8% lower on a year over year basis. The company expressed confidence that sales had shown signs of recovery in Britain’s tourist spots since reopening. But sales were still under pressure in London and metropolitan areas.
Whitbread posted an annual growth of about 5% in the stock market last year. At the time of writing, it is valued at £4.11 billion and has a price to earnings ratio of 16.36.