Share prices plummet as Cineworld confirms plans to place its screens in winter hibernation with the loss of all staff
Cineworld is set to cut tens of thousands of jobs after confirming their plans to temporarily shut down its UK and US cinemas for the winter due to the continuing disruption from the COVID-19 pandemic.
The company has said that its decision affected 45,000 of it’s employees, almost 6,000 of them in working the UK, and it is understood that they will be losing their jobs this week in the hope that they can be re-hired when the winter shut-down ends.
Those hit will include cleaners and security personnel.
Cineworld had announced the news just 24 hours after receiving a backlash from their employees over media reports that the renewed delays to key cinematic releases, such as new James Bond movie No Time To Die, have forced the company into temporarily closing down their cinema screens.
This comes after people might have been infected with COVID-19 as a result of nearly 16,000 positive coronavirus cases being missed from the government’s test and trace scheme, a cabinet minister has admitted.
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.
It 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 now 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.
This comes after the UK’s benefits system is bracing for up to four million people becoming unemployed in the coming months, due to the economic fall-out of the COVID-19 crisis accelerating.
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.
In an earlier statement, Mr Greidinger told investors:
“This is not a decision we made lightly”
“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.”
