Costa Coffee is to cut up to 1,650 jobs in its cafes – more than one in 10 of its workforce, as it said trading remained challenging during the Covid-19 pandemic. The company, which was bought by Coca-Cola two years ago, said it had now reopened 2,400 of its 2,700 UK outlets – all of which closed for six weeks during the lockdown. It plans to reopen the remaining stores over the next month. All Costa staff were put on the furlough scheme with full pay but as that scheme winds to a close the coffee shop group said it would remove the assistant store manager role across all shops to cut costs. “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,” the company said in a statement. Costa’s move comes as service-sector companies in Britain cut jobs at a faster pace than in the 2008 financial crisis, according to a closely watched survey of business activity. Despite the return of economic growth as lockdown controls have been relaxed, IHS Markit and the Chartered Institute of Procurement & Supply said the rate of redundancies accelerated in August. It said as many as one in three companies in a survey of 650 service sector firms had reduced their staffing levels last month, with businesses putting redundancy measures in place as their usage of the government’s furlough scheme winds down. The job cuts at Costa come after rival coffee shop chain Pret a Manger said last week it planned to cut nearly 2,900 jobs after its sales plummeted. Airport and train station specialist SSP, which owns Caffé Ritazza and Upper Crust, said in July it would cut 5,000 jobs because of dwindling passenger numbers, while the high street cafe Le Pain Quotidien shed 200 staff and closed 11 of its 26 sites after falling into administration. In July, Coca-Cola said its sales of tea and coffee had fallen by nearly a third in the three months to June, largely due to the temporary closures of nearly all its Costa cafes in western Europe. Neil Lake, managing director for Costa Coffee UK and Ireland, said: “We have had to make these difficult decisions to protect the business and ensure we safeguard as many jobs as possible for our 16,000 team members, whilst emerging stronger ready for future growth.” Costa said it would seek to find those whose jobs were at risk alternative roles within the business where possible and provide support to help for those leaving the business.