Premier Inn owner Whitbread has announced that it plans to cut around 1,500 jobs across the UK. The group plans to reduce the number of its branded restaurants by more than 200 and build more hotel rooms instead.
The group, which owns restaurants such as Brewers Fayre and Beefeater, said the layoffs were still subject to consultation and would affect the entire UK workforce of 37,000 employees.
The move is part of a plan to “optimise” the food and beverage offering, which includes the creation of more than 3,500 additional hotel rooms across the hotel complex and an increase in “operational efficiency”.
Whitbread announced the sale of 126 of its less profitable branded restaurants; 21 sales have already been completed.
In addition, 112 restaurants will be converted into new hotel rooms.
Managing Director Dominic Paul said: “We recognise that our transition will impact some of our team members, so we will provide support throughout the process and work hard to enable as many affected people as possible to remain with us.”
The FTSE 100 company reported pre-tax profits of £452 million for the year ended February 29, up 21 percent from the previous year.
But the restaurant and pub division, which also includes Bar+Block and Table Table, lagged behind.
The company’s total food and beverage sales increased by only 7% year-on-year, mainly due to the restaurant chain’s breakfast offering.
In the seven weeks to April 18, the most recent period on record, food and beverage sales fell 2%.
As a result, the cost-cutting program will result in savings of around £150 million over the next three years, Whitbread said.
The company also said it would offer shareholders a £150 million share buyback over the next six months and increase dividend payments by 26% this year.
Mr Paul said the company’s financial performance was “truly excellent” and the Premier Inn hotel brand was the “driving force” behind the results.
Regarding the job cuts, he said the decision was “a real challenge for us. It’s really important that we handle this properly in the interests of our employees.”
However, he added: “We have also been careful to ensure that we balance our business overall. What we have announced today will increase our profits and earnings, and that is also important for our employees because it allows us to continue to invest in our people in the company.”
“We are a listed company and therefore have to think about our shareholders. Our capital repayment policy with dividends and share buybacks is part of this context.”
