// WHSmith to slash up to 1500 jobs amid “slow” Covid-19 recovery
// WHSmith said its shops in airports and railway stations – usually the star performers – have been hit by low passenger numbers
// High street stores have also suffered from low footfall
WHSmith is planning to cut more than 1000 jobs across its UK store operations as bosses said its recovery from the Covid-19 lockdown has been “slow”.
The books and stationery retailer said it would start consulting with UK staff over plans that could see as many as 1500 of them losing their roles.
WHSmith said it needed to reduce costs as its shops in airports and railway stations – usually the star performers in its trading updates – have been hit by low passenger numbers while its high street stores have also suffered from low footfall.
- 150 office jobs at risk as WHSmith begins redundancy consultations
- WHSmith revenues drop 74% due to lockdown
- WHSmith manages to raise £166m to beat coronavirus crisis
“As a result of the impact on passenger numbers and lower footfall on the UK high street, we have taken the difficult decision to review our store operations across both our travel and high street businesses,” WHSmith said in its trading update this morning.
“We are now starting a collective consultation on a proposed restructure which could lead to up to c.1500 roles becoming redundant.
“This has been a very difficult decision and we are committed to supporting all our colleagues throughout this process and ensuring it is conducted fairly.
“Based on our initial assessment, we believe that the costs associated with the restructure will be in the region of £15 million – £19million, reflecting the group’s enhanced redundancy policy.”
WHSmith said just over half of its UK travel shops have reopened and that 246 of its largest sites have started trading again.
It added that all 575 of its high street stores have opened, but footfall is strongly down compared with the same period last year.
Revenue was 57 per cent lower last month compared with July 2019, even as sites started to welcome customers back, with most of this loss coming from the travel arm.
“We now need to take further action to reduce costs across our businesses,” WHSmith chief executive Carl Cowling said.
“I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions, and we will do everything we can to support them at this challenging time.”
Although travel revenue has started to recover from the peak of the pandemic in April, when it was down 92 per cent on last year, sales were still nearly three-quarters lower in July.
WHSmith’s high street revenue, meanwhile, has gone from 71 per cent down in April to 25 per cent down in July compared with the same months in 2019.
The retailer said its US operations should recover quicker, as most flyers travel domestically.
Revenue in the travel business there is down 80 per cent, but the 147 open stores are seeing an “encouraging performance,” WHSmith said.
The retailer said its loss before tax is likely to reach between £70 million and £75 million for the year ending August 31.
The full results will be announced in November.
“Covid-19 continues to have a significant impact on the WHSmith Group,” Cowling said.
“Throughout the pandemic, we have responded quickly and taken decisive actions to protect the business, including substantially strengthening our financial position.
“We have also welcomed support from government where available.”
with PA Wires