Whitbread is set to cut about 3,800 jobs in the UK and Ireland while closing its remaining Beefeater and Brewers Fayre restaurants. This decision marks a significant shift towards becoming a pure hotel business.
The company plans to convert all 197 of its remaining branded restaurants into hotel-based food and drink services. This restructuring affects approximately 12% of Whitbread’s 30,000-strong workforce.
Whitbread’s new strategy follows increased costs linked to recent fiscal changes in the UK. The firm also intends to sell and lease back £1.5 billion of its freehold properties.
The Unite union has expressed concern over the job cuts and is seeking consultations with Whitbread regarding the proposed redundancies. Colenzo Jarrett-Thorpe from Unite criticized the company for not informing employees before making the announcement.
Key facts:
- The Beefeater brand was established in 1974.
- Whitbread has over 800 Premier Inn hotels in the UK.
- The company’s revenues for the year ending February were flat compared to the previous year.
- Whitbread shares have fallen 20% in the past six months.
- The firm aims to reduce net capital expenditure by more than £1 billion over the next five years.
Dominic Paul, CEO of Whitbread, stated that they plan to convert their remaining branded restaurants into an integrated food and beverage offer preferred by hotel guests. He emphasized that this approach would unlock opportunities for more profitable extension rooms.
This strategic pivot comes after a review initiated by Whitbread in November, following earlier cost-saving measures that cut 1500 jobs. The hospitality sector faces challenges amid rising operational costs, prompting companies like Whitbread to reevaluate their business models.
