Nearly 20 staff members at the Savoy in London face unemployment, less than a month after the hotel's owner revealed the property is at risk of breaching its bank loans unless trade improves.
It is understood that 18 employees, all believed to hold management positions, entered a consultation period this week at the iconic hotel, operated by Fairmont Hotels and Resorts, which refused to confirm the exact number of staff affected.
A source close to the hotel said: "Eighteen people were called in to start the consultation process earlier this week. It looks like it's mostly management positions that will be affected."
The Savoy, which employs 487 staff, had a wage bill of £13.4m for 2012, up 3.8% from £12.9m the previous year.
Breezeroad Limited, which owns the hotel on the Strand, filed documents at Companies House earlier this month in which it said that bank financing had been secured until 2018.
The directors' report said that projections indicated that it would continue to meet all its liabilities as they fall due, but only if performance improves.
The hotel posted a net loss after tax of £53.5m for the year ended 31 December 2012, a 7.3% increase on 2011 (£49.6m), which was the hotel's first full year of trading after closing for a £210m three-year renovation. It reopened in October 2010.
The news follows the promotion of James Pare to the role of executive chef, with responsibility for the hotel's five kitchens and 94-strong brigade of chefs.
He takes over from Bernhard Mayer, who left last month to pursue other opportunities, a spokesperson for the Savoy told Caterer and Hotelkeeper earlier this week.
Commenting on the redundancies, the spokesperson said: "After three years of operating The Savoy since reopening, we have taken the opportunity to re-evaluate our operations and, as such, have made some changes that we feel appropriate. These changes will in no way have an impact on our guests and their experience or on the positioning of The Savoy."
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London Savoy hotel risks loan breach if results don't improve >>**