UK's Costa Coffee may cut 1,650 jobs as virus-hit forces restructuring

Costa Coffee, a unit of Coca-Cola Co, said on Thursday a plan to deal with the hit to its UK stores from the COVID-19 health crisis could result in 1,650 people losing their jobs, becoming the latest British chain to warn of layoffs.

The coffee chain, which employs around 16,000 people across 1,600 wholly-owned stores in the UK, said its plan includes removing the role of assistant store manager in the UK business.

The business model of coffee shops, located mainly in town centres and cities, has been hammered as many people still work from home.

Britain has been encouraging people to get back to their places of work, ramping up Prime Minister Boris Johnson's calls to revive the economy.

"While trade is returning, helped by the Government's VAT reduction, which Costa passed on to customers in full, and the recent "Eat Out To Help Out" Scheme, there remain high levels of uncertainty as to when trade will recover to pre-COVID levels," Costa said.

Coffee and sandwich chain Pret A Manger had last month said it was cutting 2,800 jobs as part of a lockdown-induced restructuring, while restaurant operator PizzaExpress decided to lay off 1,100 jobs through 73 outlet closures.

Costa said it will seek alternative roles within the business for those at-risk where possible and will provide support for those leaving the business.

Founded in London by Italian brothers Sergio and Bruno Costa in 1971, Costa operates in 31 international markets, with over 2,700 coffee shops in the UK and Ireland and more than 1,200 shops globally.

Coca-Cola bought Costa for $5.1 billion in 2018 from Premier Inn-owner Whitbread.