Contract catering giant Aramark is set to make sweeping staff cuts across the company's management in a bid to be "leaner", Caterer has learnt.
Chief executive Andrew Main confirmed the cuts, citing the tough financial climate. "In this challenging economic environment we have regularly reassessed how best to resource our organisation to best serve our clients and customers," he said. "We are proposing to make changes across our business to help craft a leaner support organisation."
He also put the redundancies down to a need to invest in other areas of the business, adding: "By acting now we can significantly strengthen our overall business performance through investing in the areas that will further enhance our ability to create value for our clients, our customers and our people and to profitably grow into the future."
But some industry sources said that the cuts were to do with profitability. One told Caterer: "I believe there is significant activity going on in some contract caterers to reduce their fixed cost base, simply because margins are reducing.
"Aramark has had some particularly bad results recently, including the loss of its £40m prison shop contract, which has had a massive effect. It also had big business in the City of London and is feeling the effect of the downturn," they added.
Another commented: "This is the catering industry waking up to the fact that there's a worldwide recession."
Consultant Chris Stern, director of the Stern Consultancy, admitted he was shocked by the announcement. ""It's seems to have come out of the blue," he told Caterer.
"Until we know who's going, and from which departments, it's hard to know what it means for Aramark - but it does seem to have been putting in a lot of aggressive bids lately, so perhaps it indicates that it's not making as much money out of business as it used to. Like many others, it's having to look at overheads and trim them."
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