The devastated owners of Hays Travel have revealed they were forced to axe 878 staff after the newly-imposed Spain quarantine brought holiday bookings to a halt.
The company which bought 555 Thomas Cook travel agents last year is to cut up to 878 of its 4,500 jobs.
It said it has ‘made every possible effort’ to avoid job losses ‘during these extraordinary and distressing times’.
Owners John and Irene Hays said: “We are devastated that after all of our efforts and the huge investment we’ve made we now face losing some of our valued employees, through no fault of their own.
“Following the decision to ban travel to Spain and the changes in furlough conditions coming at the same time, we have had no choice.
“We are also devastated for everyone who may lose their job and we will do all we can in consultations to help them, as we focus on retaining as many people as possible and rebuilding consumer confidence through our renowned friendly and knowledgeable customer service.”
Appearing on BBC Radio 4’s Today Programme the couple spoke about the difficult decision to cut jobs and the terrible impact the new Spain quarantine rules had on their business.
Irene Hays said: ‘It’s been an incredibly difficult day. We took the decision on Friday and have been going through due process and then started the communications with out staff this afternoon. We wanted to speak to them all personally, so John took one cohort and I took the other at 2.15 this afternoon.
‘We then followed that up with an all staff video and then put out wider communications, its been incredibly difficult. These people are losing their jobs through no fault of their own.’
On how many staff being made redundant are former Thomas Cook employees, John said: “yes we took on 2,000 ex-Thomas Cook colleagues. We don’t think there are any of them in this redundancy process at all so they will be spared the trauma of a second round twice in one year.’
Mr Hays was asked if the ending of the furlough scheme is why the business has been forced to make such drastic cuts, but he said this the impact was ‘not really very much.’
He added: The major contributor has been the banning of travel to Spain and the Spanish islands so a week and a half ago we were trading quite well and every single day in the last few weeks we have sold more and more holidays and the picture was getting brighter and brighter but the announcement about 10 days ago last weekend about Spain has regressively brought that to a halt.’
It came just hours after fitness firm DW Sports said it is to tumble into administration, with 1,700 workers at risk.
Hays Travel was ‘on track for recovery’ when the Foreign Office stopped advising against all non-essential travel in early July.
But the decision to reintroduce restrictions for people going to Spain ‘triggered the cancellation of hundreds of thousands of holidays’ across the travel industry.
Owners John and Irene Hays said: ‘We are devastated that after all of our efforts and the huge investment we’ve made we now face losing some of our valued employees, through no fault of their own.
‘Following the decision to ban travel to Spain and the changes in furlough conditions coming at the same time, we have had no choice.
‘We are also devastated for everyone who may lose their job and we will do all we can in consultations to help them, as we focus on retaining as many people as possible and rebuilding consumer confidence through our renowned friendly and knowledgeable customer service.’
Hays surprised many in October 2019 when it said it was taking charge of all of Thomas Cook’s 555 travel agents, after the 178-year-old firm went out of business.
This prevented thousands of staff from losing their jobs. Hays said it has had ‘no significant redundancies in its 40-year existence’.
It is consulting with 344 employees who are training as travel consultants and 534 who work in its foreign exchange division.
Meanwhile DW Sports is expected to appoint insolvency specialists today after its income was wiped out by the closure of stores and gyms during lockdown.
The company, founded by ex-Wigan Athletic owner Dave Whelan, had 73 gyms and 75 retail sites across the UK but announced plans to shut 25 of its stores last month.
It said it will wind down its retail business for good, with its website ceasing trading with immediate effect and closing-down sales starting at its 50 remaining stores.
It is understood it plans to protect as many jobs and gyms as possible through the restructuring process.
The fitness empire is the latest in a long line of high street stores and companies to announce job cuts and store closures in the wake of the coronavirus pandemic.
DW Sports stressed Fitness First – its sister company – will continue to operate as a separate business and its 43 clubs will be unaffected by the administration.
The administrators intend to support employees, customers and gym members as far as possible while they look to secure a buyer for DW Sports’ portfolio.
So far 59 of its gyms have reopened in England and Northern Ireland, with a further 14 sites in England, Scotland and Wales unable to open due to Government rules.
Chief executive Martin Long said: ‘As a consequence of Covid-19, we found ourselves in a position where we were mandated by Government to close down both our retail store portfolio and our gym chain in its entirety for a protracted period, leaving us with a high fixed-cost base and zero income.
‘Like many other retail businesses, the consequences of this extremely challenging operating market have created inevitable profitability issues for DW Sports.
‘The decision to appoint administrators has not been taken lightly but will give us the best chance to protect viable parts of the business, return them to profitability, and secure as many jobs as possible.
‘It is a difficult model for any business to manage through without long-term damage, and with the limited support which we have been able to gain.
‘Having exhausted all other available options for the business, we firmly believe that this process can be a platform to restructure the business and preserve many of our gyms for our members, and also protect the maximum number of jobs possible for our team members.’
Julie Palmer, partner at corporate restructuring firm Begbies Traynor, said: ‘DW Sports in the latest corporate victim of Covid-19 as the pandemic has forced the business to close its gyms and retail outlets during the UK lockdown, leaving the firm with fixed overheads and zero revenue streams.
‘DW Sports may be an established name, but with no income into the business, it has been left vulnerable to the harsh economic conditions that have drastically impacted the retail and leisure sectors.
‘This is a worrying sign for other consumer-facing businesses who will have experienced the same challenges and could themselves be susceptible to financial distress, especially with the potential of a second wave of coronavirus infections.
‘And although retail sales have seen a bounce back since stores reopened, this has mainly been for essential items, and not for sports related products such as clothing or equipment.
‘Yet, the company does have an attractive portfolio, and if an investor/investors with enough cash can offer a lifeline to provide stability for the short-term, it has the potential to go from strength to strength in the long-term.’
DW follows Marks & Spencer which said it will axe 950 staff in the first wave of a cull that will hit thousands of workers.
The announcement came after John Lewis and Boots already shed thousands of staff in the wake of the coronavirus pandemic.
Britain’s high streets have been hammered by the crisis as millions of shoppers move to online shopping, and experts predict there will eventually be 250,000 redundancies across the sector.
Shops are now allowed to welcome customers into stores but millions are still staying away, with footfall down 65 per cent last month compared to last year and sales tumbling by 48 per cent over the past three months.
Hundreds of job losses were set for M&S as part of an ongoing restructuring plan which could ultimately see thousands of positions go.
The strategy, dubbed ‘never the same again’ at the chain’s annual results in May, is expected to bring about a complete overhaul in the business in the coming months as it adapts to the long-term impact of the pandemic.
Sources close to the plans told Sky News that several thousand jobs were expected to be lost over the coming months as chief executive Steve Rowe pushes through the company’s restructuring programme.
The initial phase will see the first cuts to M&S’s 78,000-strong workforce since most of its shops were temporarily shut at the start of lockdown.
Later job losses are then likely to come after a review of costs by bosses in different parts of the company such as retail and property, clothing and home, and food and international.
The total numbers axed are likely to amount to several thousand, it was reported.
Earlier last month, Boots axed 4,000 jobs and closed 48 stores, citing the ‘significant impact’ of Covid-19. Meanwhile John Lewis shut eight large stores, putting 1,300 employees at risk.
Burger King also announced it would shutter one in ten outlets, jeopardising 1,600 positions.
And around 5,000 employees have gone at Cath Kidston, Laura Ashley, Harveys furniture store, Monsoon, Accessorize and Harrods.
Some 27,000 M&S employees were furloughed under the Government’s job retention scheme, which was designed to prevent mass lay-offs.
In 2018, M&S announced plans to close up to 120 of its full-line clothing stores, more than half of which have now been shut. It now has just under 300 clothing and home shops in the UK.
M&S has indicated that it will not pay shareholders a dividend for this year, while Mr Rowe has agreed to a pay freeze and, as in the last financial year, will not take an annual bonus.
An M&S spokesman said: ‘We don’t comment on speculation and, if and when we have an announcement to make, our colleagues will be the first to know.’
Pizza Express was to latest high street chain to reveal it was struggling, as it plans to close around 75 of its 470 UK restaurants.
The branches are facing closure as part of a financial restructuring of the business, which is one of Britain’s biggest restaurant operators.
The exact number of branches being closed is yet to be confirmed and could depend on the progress of talks with landlords, set to start next week.
One source told Sky News the number could be higher or lower than 75, but is unlikely to be more than 20 per cent of the restaurant’s UK outlets.
That means as many 94 sites could be closed, impacting hundreds of jobs, with Pizza Express employing 8,000 workers in the UK.
More than 250,000 High Street jobs could be axed in total as Britons move to shopping online during the coronavirus crisis.
Retail expert Richard Hyman told The Sun: ‘If you think there are 9.5million people on furlough, 250,000 redundancies is quite a reasonable number.
‘Pre-pandemic online sales accounted for 30 per cent of non-food sales. That will rise to 40 per cent, which means hundreds of thousands of job losses.
‘Lockdown has been the catalyst, not the cause. Big firms like John Lewis have needed to shut stores for years.’
It comes after Office For National Statistics figures last month showed workers fell by 74,000 last month, with 649,000 gone since lockdown was imposed in March.
However, other data shows the British job market is showing signs of strength, with more than a million vacancies being advertised last month. There was a significant increase in job adverts for IT professionals, recruitment specialists said.
The leisure and hospitality sector has borne the brunt of coronavirus job cuts, with London’s Southbank Centre revealing it may have to cut two-thirds of its staff and Canterbury Cathedral asking workers to take voluntary redundancy.
The Southbank, which is the biggest arts complex in Europe, warns that 400 of the 600 jobs at the centre in Waterloo are at risk, despite the Government providing £1.57billion worth of financial aid to the arts sector as a whole.
Chief executive Elaine Bedell, Hayward Gallery director Ralph Rugoff and music director Gillian Moore said in a letter to members that staff had been told that ‘very significant losses’ were likely by the end of the financial year.
The Southbank Centre comprises a number of venues for the performing arts. Its three main buildings are the Royal Festival Hall, the Queen Elizabeth Hall and the Hayward Gallery.
The organisation, which has furloughed most of its 600 employees, has predicted that it could face a £5.1million deficit for the 2020-21 financial year, the Guardian reported.
And Canterbury Cathedral’s 300 staff were previously told it would have to make job cuts in a bid to counter a ‘substantial loss of income’ as a result of the coronavirus.
Unemployment increased by 34,000 reaching 1.3 million in April while the total figure for workers on British company payrolls fell by 649,000 between March and June, Office for National Statistics (ONS) data shows.
But demand for web designers and developers has surged by 15.5 per cent over the last month, the Recruitment & Employment Confederation (REC) has revealed.
The industry group says large and small British firms now realise digital skills are essential to all components of business – such as online sales through websites, improving marketing efforts and increasing productivity.
Deputy chief executive Anthony Walker told the BBC: ‘We’ve seen two years of digital transformation happening in the space of two weeks.
‘A lot of business leaders we’ve been talking to, and survey data, shows that digital will be more important to their business, as a result of the coronavirus pandemic.’