By Ben Kerrigan-
Cafe Chain Costa says 1,650 staff are at risk of redundancy as it looks to cut costs amid continued uncertainty over when trade will fully recover following the pandemic.
The company says there are still “high levels of uncertainty” as to when trade will regain pre-pandemic levels. Costa said it had taken decisive action to provide, where possible, financial support and to look after team members. throughout the pandemic.
Costa confirmed that all team members were put on the furlough scheme helpfully provided by the Government, with their salary topped up by Costa to 100% for 12 weeks.
And they confirmed that a number of options were reviewed prior to making the difficult decision to launch today’s consultation. Costa has made significant investments in safely accelerating the re-opening of stores, ensuring they are safe for customers and team members and made the difficult decision to freeze all pay increases within the Support Centre and cut all non-essential expenditure.
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.
Consultations
Staff were told on Thursday that the company has begun consultations which could affect more than a tenth of roles. The move comes a week after rival Pret A Manger revealed it was slashing 2,800 jobs as part of a restructure of its UK business.
Costa closed nearly all of its 2,700 UK stores for six weeks during the pandemic but has now reopened around 2,400 sites. The Coca Cola-owned chain said trade is “returning” after being boosted by the Government’s VAT reduction on food and non-alcoholic drinks and the recent Eat Out To Help Out scheme.
It added that the proposed job cuts had been driven by “high levels of uncertainty as to when trade will recover to pre-Covid levels”.
The restructuring will include removal of the assistant store manager role across its UK business. It also stressed that it will seek to find those at risk alternative jobs in the business where possible, and provide support for those leaving.
The company has also frozen all pay increases within its head office and axed all non-essential expenditure as part of its cost-cutting efforts.
Neil Lake, managing director for Costa Coffee UK & Ireland, said: “Today’s announcement to our store teams was an extremely difficult decision 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.
“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.
“As a proud member of the UK high street, we remain committed to the role Costa plays in supporting the economic recovery of the country, but today I want to say a huge thank you to all of our team members that are affected by this announcement and we will be supporting you throughout this process.