Coronavirus: 45,000 to lose their jobs as Cineworld brings curtain down on UK and US cinemas
Cineworld is on course to cut tens of thousands of jobs after confirming plans to temporarily bring the curtain down on its UK and US cinemas because of continuing disruption from the coronavirus pandemic.
The company said its decision affected 45,000 workers, almost 6,000 of them in the UK, and Sky News understands they will lose their jobs this week in the hope they can be re-hired when the hibernation ends.
Those hit will include cleaners and security personnel.
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Cineworld announced the news 24 hours after receiving a backlash from employees over media reports that renewed delays to key releases – such as new James Bond movie No Time To Die – had forced the company into temporarily closing down screens.
Cineworld said on Sunday that no decision had been taken.
Its announcement to the City on Monday read: “Cineworld confirms that it will be temporarily suspending operations at all of its 536 Regal theatres in the US and its 127 Cineworld and Picturehouse theatres in the UK from Thursday 8 October 2020.
“As major US markets, mainly New York, remained closed and without guidance on reopening timing, studios have been reluctant to release their pipeline of new films.
“In turn, without these new releases, Cineworld cannot provide customers in both the US and the UK – the company’s primary markets – with the breadth of strong commercial films necessary for them to consider coming back to theatres against the backdrop of COVID-19.”
The announcement prompted a horror show for the company’s shares, which plunged by 57% at the open as investors digested the implications.
The shares partly recovered later but were still 36% down by the close.
Cineworld’s decision leaves staff at the mercy of a tough jobs market at a time when the government’s furlough scheme – tapped by Cineworld during the lockdown that began in March – is coming to an end.
Its replacement from November, the Job Support Scheme, will only support the wages of those in “viable” employment, working reduced hours.
The firm, which had already announced that it was seeking new funding to help it ride out the pandemic, is understood to be planning an incentive scheme to get staff back at reopening – whenever that may be.
Chief executive Mooky Greidinger used an interview with Sky News to liken the company’s position to that of a “grocery shop with no food” as he expressed hope the company could resume screenings within two to three months.
He told Ian King Live it was bleeding cash because of the delays to new releases and he had acted to preserve the company’s future for its “big family” of staff.
“In order to secure their place of work we have to take this measure now. I hope they will be supported by all kinds of government plans,” he said.
In an earlier statement, Mr Greidinger told investors: “This is not a decision we made lightly, and we did everything in our power to support safe and sustainable reopenings in all of our markets – including meeting, and often exceeding, local health and safety guidelines in our theatres and working constructively with regulators and industry bodies to restore public confidence in our industry.
“We are especially grateful for and proud of the hard work our employees put in to adapt our theatres to the new protocols and cannot underscore enough how difficult this decision was.
“Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen.”
Following the announcement, Sky News has learnt that lenders to Cineworld Group have parachuted in advisers for urgent talks on the company’s $8bn (£6.2bn) debt mountain.
A syndicate of banks has appointed FTI Consulting to negotiate with the stricken multiplex operator following a pitch process last week.
Separately, rival cinema chain Odeon has revealed it is to switch to weekend-only opening at a quarter of its 120 sites
Labour said the Cineworld job losses were the result of government mismanagement of the crisis.
Boris Johnson acknowledged there would be “tough times ahead” in the jobs market but he told reporters people should support cinemas where they could.
“Supporting local cinemas – I think we’ve already put £30m in, but what I would say to people is that local cinemas do now have ways of making their shows go on in a Covid-secure way and I’d encourage people to go out to the cinema, enjoy themselves and support those businesses.”
(c) Sky News 2020: Coronavirus: 45,000 to lose their jobs as Cineworld brings curtain down on UK and US cinemas