Coronavirus: Upper Crust owner blames lockdown for 5,000 UK redundancies
SSP confirms a story by Sky News that it plans to cut more than half its 9,000-strong UK workforce as lockdowns take their toll.
Wednesday 1 July 2020 17:48, UK
The company behind railway station and airport food outlets Upper Crust and Caffe Ritazza has confirmed plans for 5,000 job losses in its main UK market.
SSP Group issued a statement to the City to outline its plans, hours after Sky News revealed contents of a memo sent to workers on Tuesday which outlined a need to "reshape" the business amid the hibernation forced on the company's operations by coronavirus-linked travel restrictions - with lockdowns taking its toll on sales globally.
The company said on Wednesday that it would have to cut the roles, accounting for more than half of its 9,000-strong workforce in the UK, if the pace of recovery continued at the current level.
The rail union reacted to the news by demanding the government intervene.
Out of 581 UK stores, only nine are currently open including just one in its core rail operation.
SSP warned that it expected only a fifth of its 2,800 global outlets to be open again by the autumn - with the UK's current 14-day quarantine policy for international travellers knocking its airport operations.
Chief executive Simon Smith told investors: "COVID-19 continues to have an unprecedented impact on the travel industry and on SSP's businesses in all geographies.
"Reflecting this, over the last three months the company has taken rapid and decisive action to protect the business and to substantially strengthen the group's financial position.
"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.
"In response to this, we are now taking further action to protect the business and create the right base from which to rebuild our operations.
"Regrettably, we are starting a collective consultation which will affect our UK colleagues. These are extremely difficult decisions, and our main priority will be to conduct the process carefully and fairly.
"Importantly, we are retaining the flexibility to upscale operations and swiftly reopen additional units if we see improved sales over the summer."
It put a cost of up to £10m on its UK job losses.
The majority of the workforce currently remains on furlough under the government's Job Retention Scheme.
SSP has also accessed funds under the Bank of England's financing facility and said it was confident it had sufficient liquidity to ride out the storm amid the collapse in sales.
It continued to support a trading scenario reported last month that envisaged group revenue being down approximately 80% to 85% in the second half of the year - with operating losses of up to £250m.
It reported that sales during June "recovered slightly" but remained about 90% below the same month last year.
Shares in the group have lost 60% of their market value in the year to date.
They closed down 2.26% on Wednesday.
Mick Lynch, RMT union assistant general secretary, said: "The news that Upper Crust, major caterers on Britain's railway stations, have announced savage job cuts shows that support services across the rail industry are facing a real crisis in the months ahead which will hammer both the workforce and those who rely on their facilities if the Government doesn't intervene as the lockdown eases.
"Our railway stations are in danger of ending up as ghost towns as we emerge from the pandemic."