Cineworld to cut 45,000 roles in US and UK after announcing it will be closing its doors
Cineworld has announced that will be temporarily bringing the curtain down on its US and UK cinemas due to the impact of the coronavirus pandemic on the industry.
As a result, more than 45,000 employees, around 6,000 of them in the UK, will lose their jobs this week. Most of the losses will come from the in-cinema staff, rather than administration roles.
The cinema chain said that they did hope they can be re-hired when the firm’s hibernation ends. Cineworld is currently £2.6bn in debt.
A company statement 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.”
Many cinemas were relying on new blockbusters to bring back customers, following the relaxing of COVID-19 restrictions. However, with a second spike in cases and many films delaying release – including the new James Bond movie No Time To Die – the company has had to temporarily close down.
Cineworld CEO Moshe Greidinger said: “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.”
Covid horror story for Cineworld as it is forced to close its venues
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
The beleaguered entertainment industry has taken another huge blow with the confirmation that all of Cineworld’s venues will close their doors temporarily, affecting 45 thousand jobs in the UK and the US. Although the delay of the latest 007 blockbuster prompted the decision, Bond isn’t the villain in this piece. The spread of Covid-19 around the world has been a horror movie for the industry and the fresh wave of infections is the latest installment in what’s been a devastating story for cinema chains.
New infection spikes amid warnings that the virus spreads more quickly indoors, is keeping customers away and with no big names to lure them through the doors this winter, Cineworld has reached this difficult decision in a bid to cut costs and preserve cash. With a vaccine still just out of reach, Cineworld won’t put a date on when venues will reopen next year and is now assessing various sources of additional liquidity, including raising cash from shareholders to try and stay afloat.
All operations will be suspended at 536 theatres in the US and 127 Cineworld and Picture house theatres in the UK on Thursday. The news will increase the clamour for more support for the entertainment, recreation and arts industry which still has 51% of workers on furlough.
The new jobs support scheme, which will subsidise wages of part time workers will provide no lifeline for the 5,500 Cineworld UK employees who will lose their jobs this week and many others across the industry are facing a bleak winter on jobseekers benefit, while they begin the difficult search for new positions in the run up to Christmas.