Whitbread, the parent company of Premier Inn, has announced plans to cut around 1,500 jobs in the UK as part of an “accelerating growth plan” that includes building more hotel rooms and reducing its chain of branded restaurants by over 200 locations.
The decision was made after the company reported a 36% increase in annual profits, reaching £561 million. In a statement, Whitbread stated that the job cuts would be subject to consultation and that efforts would be made to redeploy affected employees within the company’s hotel investment focus.
The group’s restaurant division, which includes popular brands such as Brewers Fayre and Beefeater, has been a financial burden for Whitbread since the start of the pandemic. As the economy begins to recover, the company has faced additional challenges, such as rising costs and a decrease in consumer spending power.
In an effort to optimize its operations, Whitbread plans to sell 126 of its less profitable branded restaurants, with 21 sales already completed. Additionally, 112 restaurants will be converted into new hotel rooms. These changes are expected to add over 3,500 new hotel rooms across the company’s estate and improve operational efficiencies.
Despite the company’s positive financial results, sales in its food and beverage division have decreased by 2% in the first seven weeks of the new financial year. Whitbread’s chief executive, Dominic Paul, acknowledged that the restructuring plan would impact some team members and stated that the company would provide support throughout the process. He also expressed the company’s commitment to retaining as many affected employees as possible.
Shares in Whitbread had dropped by almost 15% since the beginning of the year, but rose by 1.7% at the open following the announcement. Analysts have noted the company’s focus on achieving more profitable growth in its UK core market, as well as its plans for a share buyback of £150 million and a 26% increase in its final dividend.
The company’s annual awards, covering the period up to 29 February, reflect its success in navigating through the challenges of the pandemic. Whitbread’s commitment to its employees and shareholders is evident in its plans for continued growth and profitability.
