Stagecoach plans job cuts and predicts bus passenger reduction is long term

  • 7/23/2020
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The coronavirus pandemic will lead to a long-term reduction in the number of people travelling to work or the shops, one of Britain’s biggest bus operators has warned. Stagecoach, which runs major bus services across Britain, said on Wednesday that it did not expect passenger numbers to return to 2019 levels for several years. It plans to cut an undisclosed number of jobs in office-based roles to save £9m. “We expect a lasting effect of the Covid-19 pandemic on travel patterns with an acceleration in trends of increased working from home, shopping from home, telemedicine and home education,” Stagecoach said. Several major companies have told their employees they did not expect an imminent return to offices. Royal Bank of Scotland, now known as NatWest Group, this week told staff they would not return to the office until 2021. The announcement came just days after the prime minister, Boris Johnson, said people they should begin to return to their workplaces if possible. Martin Griffiths, Stagecoach’s chief executive, said “some of the things we are seeing in the lockdown are accelerating structural changes”, such as more jobs being carried out online. The pandemic resulted in a 90% drop in daily passenger numbers at the height of the lockdown, Stagecoach said. However, the company said travelling numbers had since recovered to about 40% of 2019 levels. Its buses are running 80% of the daily miles before the pandemic, it said, with the government paying it to continue to operate services that would otherwise be unprofitable, to ensure key workers could still travel. The government bailed out English bus operators outside London in April as it became clear they would quickly collapse without passenger revenues. The first sector-wide package was worth £400m, with further extensions scheduled to end in mid-October. Stagecoach is in talks over whether it will receive support after that. Ross Paterson, Stagecoach’s chief financial officer, would not say how many jobs were likely to go, but said frontline workers would not be affected. However, the company surprised analysts with positive core earnings because of the government support, despite revenues being reduced by its enforced exit from the UK rail system. Its share price rose by 9% on Wednesday to 55p, though the shares were still down 60% compared with before the pandemic.

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