Cineworld shares plunge 56 per cent on plans to axe 45,000 staff
Cineworld shares plummeted as much as 56 per cent this morning as it announced plans to slash around 45,000 jobs and temporarily shutter its UK and US cinemas.
The cinema chain today said it will pull the curtain down on its 127 British Cineworld and Picturehouse cinema screens and 536 US theatres from Thursday, putting around 6,000 of its UK jobs at risk and up to 39,000 further afield.
British employees are set to lose their jobs this week, with the cinema chain hoping to rehire them at a later date, according to Sky News.
Cineworld is yet to earmark a reopening date for its venues next year, and said it is now assessing various sources of additional liquidity, including raising cash from shareholders to try and stay afloat.
The news sent Cineworld shares to an all-time low of 17p at market open, after a volatile ride last week when plans to temporarily close sites were originally tabled.
Mooky Greidinger, Cineworld chief executive, 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.
“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.”
Greidinger added that the cinema chain “will continue to monitor the situation closely” as it awaits “more concrete guidance” on reopening plans for its key markets and guidance for when “studios are able to bring their pipeline of major releases back to the big screen”.
It is understood that the delay of the new James Bond film, No Time To Die, until at least April next year was a key component in Cineworld’s decision announced today.
Industry figures have warned that the decision to delay the blockbuster release could cost UK cinemas up to £50m in lost revenue.
Cineworld has yet to give information on the implications for membership customers.
The cinema chain has lost £1.3bn globally since the outbreak of the pandemic, forcing it to slash tickets to £4 in a failed bid to lure back moviegoers.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ‘’The beleaguered entertainment industry has taken another huge blow with the confirmation that all of Cineworld’s venues will close their doors temporarily.
“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.”