People & Money

Transcorp Hotels to Lay Off 40% of Staff As Coronavirus Pandemic Hurts Business

Transcorp Hilton Hotels will prune its workforce by a minimum of 40% due to the impact of the new coronavirus pandemic on its business, the firm said on Thursday.

Dupe Olusola, the company’s managing director, told journalists at a virtual media conference it was hard keeping more than 1,000 permanent and over 500 contract staff on its payroll at a time when the business was incurring a loss of over N1 billion monthly.

Olusola explained that the hotel’s occupancy rate was between January and February at 40 to 47% but has drastically fallen since the new coronavirus pandemic halted travel, both within Nigeria and internationally, since March 2020. Transcorp Hilton has managed to pay employees’ salaries, which come in at N2 billion every month, fully in the first four months of the year despite the impact of the pandemic on its business.

Olusola added that Transcorp’s hierarchy contemplated closing the company down and firing all workers as guest traffic slowed to below 5% in its combined 810-room facility in Abuja and Calabar.

“In March alone, when the pandemic set in, the hotel was down to about five per cent occupancy (34 rooms). All the meetings scheduled between now and December have been cancelled.

Also Read: Shoprite Divestment: How Nigeria Can Keep and Attract Foreign Investment

“We have continued to suffer a drastic decline in revenue of over N9 billion and a loss of over N4.9 billion. We recorded over N456 million loss in March, and N1.03 billion loss in April, while the loss has averaged N1 billion every month since May,” she said.

The hotel is now looking to the Bureau of Public Enterprises and the presidency for a lifeline comprising payroll support and tax rebates.

“We are definitely going to let people go. We will need not more than 400 staff to keep the hotel running, or whatever the business can accommodate. At least 40 per cent of the workforce are to be disengaged. We cannot continue as a business with below 20 per cent occupancy and the current number of staff.

“Negotiations for disengagement is ongoing on what the payout terms will be, taking into consideration what will be of mutual benefit to all parties,” she said.

Related Articles

Back to top button