Cineworld, the second-largest operator of cinema in the world, was founded by Steve Wiener in 1995. Since then it has gained much popularity and has become a cinema chain with almost 10,000 screens in 800 sites in 11 countries: the UK, the USA, Canada, Ireland, Poland, Romania, Israel, Hungary, Czechia, Slovakia and even in Bulgaria. Since the time of its opening, it has employed tens of thousands of staff members including most numbers at the Regal chain in the United States of America. Its headquarters is in Brentford, the United Kingdom and the CEO of the company is Moshe J. Greidinger.
CINEWORLD CLOSED: BRIEF UNDERSTANDING OF SITUATION
In the past week, Cineworld had closed almost all of its 125 sites in the United Kingdom, including all the Picturehouse cinemas. This step was taken after the notice of the UK government who advised the public to avoid visiting any public venues or cinema halls because of the spread of coronavirus. This means all Cineworld Glasgow, Cineworld unlimited and Cineworld login services will also not be accessible. This has been upsetting news not only for the public but the staff and employees as well. Because of negligible cash inflow and the declining stock market, even the Cineworld prices share prices have also hit a major low. Even though the company reinstated its position by the actual share price still remain on the low ever since January. All of these situations led to the rapid closure of the cinema chain. Not only were the halls closed but because the company had started cost-cutting, many redundancies have also been surfacing up. This change has proven to be worsening the situation on both ends.
The company expected the change and redundancy to be a little swift but these cuts have been getting worse. Their implementation and the way they were carried out did not sit well with the employees. All those people at the receiving end are not only upset by this decision but also they have initiated a social media backlash and have raised questions from all the high-profile public figures and UK politicians. In addition to this, the staff members who have been laid off wrote to the CEO of Cineworld, Mooky Greidinger, to either be reinstated or to negotiate on some better severance terms. They got a fast reply from him wherein he promised them to explore some other alternatives, if available, in light of the decision made by the United Kingdom’s government to provide all necessary support to businesses and workers impacted by COVID-19 or coronavirus.
CORONAVIRUS DROPS CURTAIN ON CINEMAS
The effect of this pandemic has hit not only the health of people but also other aspects of day to day life. People are losing jobs, companies are on the verge of shutting down and share market is crashing on the low. Cinema and film industry are one of the many other aspects that have been affected. Cinema chain, Cineworld and Picturehouse have been shutting all their screens in all possible sites in the UK and other regions. Another reason for the business going down for the cinemas was because the political leaders and influencers have also urged the people to start social distancing and avoid going to any closed spaces, including cinema halls.
Cineworld runs in 100 sites including 24 Picturehouse sites. The box office collection in these sites has been 50% down in the past few weeks. In addition to this, the cinema halls that still remain open do not have much to present as many of the big films like James Bond’s No Time To Die and the latest Fast and Furious film F9 has been off schedule and put back.
Making the best out of the situation, some movies have even put forward the idea of home streaming for their latest releases because people are staying home. Even the big industries like Universal Pictures have started to act upon this idea releasing the films on the day as their original theatrical release date, on home streaming. movies like The Invisible Man and Emma will also be available on demand. This news is no rumour, it is confirmed.
Making a point for themselves, the entertainment and nightlife industries hugely criticised the PM for asking people to stay home when they had not put up an official notice for these industries to shut down, which in fact would’ve given them some kind of financial protection. Although the numerous people in this sector have been ensured to be given help in this exceptional and tough time, there still remains some challenges for the people and their existence.
SHARE PRICES & BOX-OFFICE FALLING DRASTICALLY
The pandemic spread of COVID-19 or coronavirus has been damaging more than just people’s health. Cineworld is now thinking that it might collapse because of these prevailing conditions dropping the share prices hugely for almost a decade. In the condition to shut down all their screens in every region, the Cineworld now fears that it will lose up to three months worth revenue, more or less. Its agreements with the lenders are, much more than ever, at risk and it has now become a matter of their survival. In FTSE the prices have gone down to the lowest of 49pc. Because of delay in the film industry, the box office ratings have also been hugely affected.
Even their annual pre-tax profits have had a great hit with a 40pc decline in profits to $212m and a 6pc decline in revenue to $4.7bn. It is said that the debt of the Cineworld might also increase and huge losses may incur. According to the analysts at Jefferies, it is estimated that in this situation of complete shutdown, the company can survive up to four months but the actual scenario tells otherwise. Contradicting this, the analysts at Peel Hunt said that the impact of coronavirus on the cinema and entertainment industry is short-lived. Whatever the situation may be or the analysts say, the actual condition of the Cineworld will be revealed with time and according to the stay of policies.
CINEWORLD STAFF MADE REDUNDANT
Amidst the pandemic outbreak of coronavirus, the cinema chain Cineworld has decided to make most of its staff redundant in regard to cost-cutting. This decision has not been taken so well by the ones at the receiving end as it has affected their existence. All the former and current employees are criticising the company’s morals and ethics, calling them irresponsible for letting people go at a time when they need this job more than ever. Even more stupid of the company was their method of informing the staff. All members that were to be laid off got emails saying, “We need to inform you that as part of our measures to save the business given the serious difficulties it is currently facing, the recipient will be laid off on 19 March, with no payment other than their contracted ‘notice pay’. When we are able to reopen, we sincerely hope you wish to return to us.”
Even Picturehouse, owned by Cineworld, that operates 26 cinemas all across the UK gave out a statement saying, “Like other businesses in the retail and leisure industry we are facing an incredibly challenging time as a consequence of the global coronavirus (COVID-19) pandemic. We value our employees and want to do everything we viably can to support them in these difficult and uncertain times. Our aim has been to preserve jobs and continue to pay as many staff as possible while they are not working.”
All these redundancies and lay-offs have been making the situation much worse on both the ends. If people will not have their jobs then it will be difficult for them to afford even the necessities because savings can only take them so far. As for the company, not only is it hard to pay off all the employees in all the sites, their normal wages when making no profit and reduced revenue, it also poses very negative publicity for their future. With all the negativity, it is not just the health that is being affected by this pandemic but also the normal workings and daily peace and harmony among the people is being fractured.
TIME TO STEP UP: A LETTER BY THE STAFF
There has been some disturbing news of redundancy for most of the employees and staff members of the Cineworld chain. Standing up for themselves, the former and current employees, about 800 till now, have united to send an open letter to the CEO of the company demanding immediate reinstatement or renegotiation on the current terms laid down. According to the company, this is a devastating decision for them as well as they will have to let go many of the loyal staff but they claim that it might be the only resort left for them. But looking at this from the affected’s point of view, the group claims that there was no consultation or previous discussion held prior to making this announcement. What was more upsetting for them was that they received this information via phone calls and emails.
In defence of their action, the company said that the government has promised to pay up to 80% of the wages of workers to help the declining condition of the companies. The employees have said that they have done their maximum part of being loyal to the company and now it is time for the company to fulfil their ethical responsibility in these hard times. The union attached to this group said that ‘To let people go at a time like this when they have no other possibility of getting a job will only further add to their anguish in the current climate.’
To stop the situation from getting worse the company is trying their best to let minimum people off and has also requested the government to step in. But only time will reveal what actually is going to happen in these already difficult times. The virus and pandemic are declining the health and survival rates along with the economy, peace and daily livelihood of many.