Catering Group Sodexo In Talks About Job Cuts; Forecasts Further Revenue Hit
French catering and food services group Sodexo has said that it is in talks with employee representatives over a planned 2,083 job cuts, and forecast a further revenue slump.
The group said that it plans to propose all possible measures to limit the impact, particularly through voluntary transfers to its other activities in France.
"I hope all the measures we take will be sufficient and will allow us to employ people again when we return to growth," chief executive Denis Machuel told reporters.
He added that Sodexo, which provides catering for businesses, government agencies, hospitals, schools and events, has already transferred thousands of employees from closed posts such as retirement homes and has identified some 600 open posts in France.
Sodexo said that the jobs cuts will represent less than 7% of its workforce and mainly affect its corporate services operation.
Restructuring costs during its 2020 fiscal year more than quadrupled to €191 million as government support schemes across its regions come to an end.
The firm forecast a 20%-25% revenue slump for the six months ending February 2021 compared to the same period of 2020, as well as a free cash flow hit of €250 million from restructuring costs, payment delays and reimbursement of Olympic Games hospitality packages.
Sodexo's core profit fell by 50% at constant rates for the fiscal year that ended on August 31 while revenue fell by 11%, beating analysts' expectations.
Machuel said that he remains confident in Sodexo's guidance after France announced a return into lockdown on Wednesday October 28.
Sodexo decided not to propose a dividend for its 2020 fiscal year.