Premier Inn owner Whitbread is to cut around 3,800 jobs in Britain and Ireland and close its remaining Beefeater and Brewers Fare restaurants as it restructures its five-year business strategy amid pressure from tax hikes and US activist investors.
The cuts will affect around 12% of Whitbread’s 30,000-strong workforce in the UK and Ireland working at its Beefeater and Brewers Fayre restaurants, which are usually located next to or within Premier Inn hotels. The company said consultations with affected employees would begin immediately.
Whitbread said it expects to retain a “significant proportion” of affected staff and will seek to find replacement roles for them, given that it hires about 15,000 people a year.
The cuts follow Whitbread’s new review of its business in November, a year after it announced its five-year plan, after it faced cost overruns in the chancellor’s budget.
The UK’s biggest hotel operator has already started converting some of its underperforming Beefeater and Brewers Fare restaurants into hotel rooms and now plans to continue the policy at its remaining 197 restaurants.
The move will involve Whitbread selling and leasing back £1.5bn of its freehold properties. Unusually for the hotel sector, the company owns a significant proportion of its hotels, although it has said it now intends to “recycle” £1.5bn to fund “future growth” and hopes to quickly lease out its hotels.
Dominic Paul, chief executive of Whitbread, said: “We intend to transform all of our remaining branded restaurants into an integrated food and beverage offering that is preferred by our hotel guests and will unlock the addition of more highly profitable expansion rooms. Our continued efforts and efficiencies to advance our commercial plan will allow us to position ourselves prominently in our market to grow.”
Whitbread warned at the end of 2025 that tax policies in Rachel Reeves’ 2025 Budget would cost her an extra £50m this year, amid changes to the way business rates are calculated. This came hot on the heels of an earlier cost squeeze from higher wage bills and rising food prices.
The FTSE 100 company, which has more than 800 Premier Hotels hotels in the UK, is under pressure from US activist investor Corvex, a New York-based hedge fund, to rethink its business strategy.
Whitbread’s new strategy means it will become a pure hotel business, almost seven years after it sold the Costa coffee chain to soft drinks giant Coca-Cola in a deal worth around £4bn.
It means that as it stands, the Beefeater restaurant brand – founded in 1974 and known for serving steaks and classic pub dishes – as well as the Brewers Fayre chain will disappear from Britain’s high streets.
The announcement came as Whitbread reported that its revenue for the year to February 26 was flat compared with the same period a year earlier.
