SSP Group, a London-based multinational food retailer and caterer, said it plans to cut up to 5,000 jobs in the U.K. as a dramatic reduction in passenger travel has hurt its outlets in airports and railway stations.
“We have therefore come to the very difficult conclusion that we will need to simplify and reshape our U.K. business, and we are now starting a collective consultation on a proposed reorganization,” the company stated.
SSP operates in more than 30 countries, including the U.S., India and China, but job cuts are only currently envisioned for its U.K. outlets.
Global sales in April and May plunged by 95% from year-ago levels, although in June the company showed somewhat stronger performance in continental Europe and North America.
The company’s most well-known franchises are the Upper Crust bakeries, deli operator Camden Food, the Caffe Ritazza coffee chain and luxury bar chain Cabin.
SSP currently has 580 outlets across Britain, but less than 10 are currently open. British rail stations, where SSP has a majority of its U.K. businesses, have suffered an 85% drop in passengers over the past year.
The company noted it only expects about 20% of its U.K. stores to reopen by the autumn.
Other regions of the company will be spared job cuts “due to our expectations of a more rapid recovery [outside Britain].”
“Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses in all geographies,” said SSP Group chief executive Simon Smith. “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 U.K. the pace of the recovery continues to be slow.”
SSP added: “If the pace of the recovery continues at the current level, this could lead to up to 5,000 roles becoming redundant from within the [London] head office and U.K. operations.”
SSP typically has about 9,000 workers in the U.K., however many have already been furloughed or have availed themselves of the government’s wage subsidy scheme.
“The reality is that passenger numbers still remain at very low levels,” Smith added. “We are now taking further action to protect the business and create the right base from which to rebuild our operations.”
SSP expects to take a related restructuring charge of up $12.37 million.
The company also said it has access to about £750 million ($932 million) in liquidity and was confident it has enough funds to continue to operate “throughout even its most pessimistic scenario.”
SSP had a global workforce of about 40,000 prior to the pandemic.