WHSmith has blamed the dramatic drop in footfall due to Covid-19 for the job cuts.
The retailer has announced that 1500 roles will be cut from its operation. In a statement, the company said, “while there has been some progress in our high street business, it does continue to be adversely affected by low levels of footfall.”
The bulk of the job losses, which amount to about 11% of WHSmith’s 14,000-strong global workforce, are expected to be in the travel division, which includes stores at airports and rail stations. Sales in the division fell 92% in the first month of lockdown and were still down by three-quarters in July, even after restrictions were eased. In the High Street division, sales were still 25% down in July after lockdown eased, and revenue across the group was down by 57% in July compared with 2019.
The travel section of the business is expected to continue to struggle, as air passenger numbers remain severely restricted and many companies across the UK continue to work from home, reducing the number of regular commuters. The company has reported similar trends in its 153 stores outside the UK.
Carl Cowling, the chief executive, said: “Covid-19 continues to have a significant impact on the WHSmith Group. In our travel business, while we are beginning to see early signs of recovery in some of our markets, the speed of recovery continues to be slow. At the same time, while there has been some progress in our high street business, it does continue to be adversely affected by low levels of footfall. As a result, we now need to take further action to reduce costs across our businesses. I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions.”
He added that the company would do “everything we can to support them at this challenging time”.
WHSmith has been gradually reopening stores, with just over half of its 580 travel shops trading and all 575 high street stores open. So far, store closures have not been announced, but it is understood that 14 smaller, kiosk-style stores in bus and railway stations will be lost. The company has also detailed plans to reduce the number of managers in stores, with remaining managers overseeing multiple outlets.
The company expects to report a headline loss before tax for the financial year ending 31st August 2020 of between £70m and £75m.