Costa Coffee warns up to 1,650 jobs are at risk

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Coffee chain Costa Coffee has said that up to 1,650 roles are at risk of being cut, as it is forced to reduce costs because of the impact of coronavirus.

It says there are still “high levels of uncertainty” as to when trade will regain pre-pandemic volumes.

The firm is consulting with staff to try to find roles in other parts of the business for those facing redundancy.

Costa Coffee said the decision to cut jobs was an “extremely difficult” one to make.

“Our baristas are the heart of the Costa business and I am truly sorry that many now face uncertainty following today’s news,” said Neil Lake, managing director for Costa Coffee UK and Ireland.

The company is suggesting the role of assistant store manager will be removed in branches across the UK.

Most of its UK coffee shops that were closed during lockdown have now reopened, but the impact of Covid-19 remains “challenging”, the company said in a statement.

Despite benefiting from measures such as the government’s cut in VAT for the hospitality industry and the “eat out to help out” scheme, the company said, “there remain high levels of uncertainty as to when trade will recover to pre-Covid levels”.

It added that it had already frozen all pay increases within its support centre and cut all non-essential expenditure.

  • Warnings of ‘ghost towns’ if offices stay empty

Costa employs 16,000 people in its wholly owned coffee shops, and there are a further 10,500 people working in its franchise network.

“We have had to make these difficult decisions to protect the business and ensure we safeguard as many jobs as possible for our 16,000 team members, whilst emerging stronger, ready for future growth”, the company said.

It is the latest food and drink company to make cuts following the lockdown and the resulting lack of shoppers and office workers in town centres.

Businesses that rely on lunchtime or after-work trade from offices have been particularly hard hit.

Last week, sandwich chain Pret A Manger announced it would be cutting 3,000 jobs, a third of its workforce.

Julie Palmer, partner at the business recovery firm, Begbies Traynor, said many firms were currently trying to cut costs.

“Attempts are being made by some businesses to work with local councils in order to utilise outside spaces where consumers feel more comfortable, but with winter approaching, they are running out of time”, she commented.

“It’s likely that as businesses try to recoup their losses from the past few months, many others will follow a similar suit to Costa Coffee.”

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