Shares of Cineworld Group plc (LON: CINE) today crashed 53% after a news report in the Sunday Times alleged that the company is considering plans to close its UK cinemas and fire its 45,000 employees over the weekend.
Cineworld said in a statement: “We can confirm we are considering the temporary closure of our UK and US cinemas, but a final decision has not yet been reached. Once a decision has been made we will update all staff and customers as soon as we can.”
The Sunday Times report said that the world’s largest cinema operator now considered the industry as being unviable and would communicate the same to the UK Prime Minister Boris Johnson and Culture Secretary in writing.
Cineworld cited the delay of big-budget movies such as ‘No Time To Die’ the latest James Bond film, whose premiere has been postponed twice up to April 2021. The firm plans to reopen its cinemas sometime next year and will ask its employees to accept redundancy in the hopes that it will rehire them in future.
Cineworld’s 546 US theatres would also have to close as part of the move.
Phil Clapp the head of the UK Cinema Association said: “Although cinemas opened in July and have been able to deliver a safe and enjoyable experience, without major new titles then we understand we aren't able to get as many people out of the home as we'd like.”
He added that he fears the closure of Cineworld was “indicative of challenges faced by the entire UK cinema industry at the moment”.
Cineworld share price
Cineworld shares today fell 53% to trade at 18.50p having ended Friday’s session trading at 39.47p