World's second largest cinema chain shuts doors due to COVID-19

The world's second largest cinema chain Cineworld has announced it will temporarily close its theaters in the UK and the U.S. /AFP

The world's second largest cinema chain, Cineworld, is temporarily shutting its theaters in the U.S. and the UK.

The move is due to low footfall as a result of COVID-19 and puts 45,000 jobs at risk, including 5,500 in the UK.

Cineworld's shares in London plunged more than 50 percent at one stage on Monday. They were already down about 80 percent this year, due to the impact of the pandemic on the entertainment industry.

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The company reopened its UK cinemas in July but customers numbers have been small since then.

Cineworld's CEO, Moody Greidinger, said it was "not a decision we made lightly."

"We did everything in our power to support safe and sustainable reopenings," he added. "We will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time."

Greidinger's statement also highlighted the challenges the firm faced in getting studios to release new movies.

Cinemas do now have ways of letting their shows go on in a COVID-secure way and I'd encourage people to go out to the cinema.

- Boris Johnson, UK prime minister

Cineworld was hoping the latest James Bond film, No Time to Die, could help turn around its fortunes. But its release was recently delayed until April 2021 – the second time it has been pushed back this year.

Despite the closures, UK Prime Minister Boris Johnson urged people to go back to movie theaters.

"Cinemas do now have ways of letting their shows go on in a COVID-secure way and I'd encourage people to go out to the cinema, enjoy themselves and support those businesses," said Johnson.

As part of the closures, 536 theaters will be shut in the U.S. and 127 in the UK.

The latest Christopher Nolan-directed thriller 'Tenet' couldn't turn around Cineworld's fortunes. /AFP

Experts say more job losses could follow in the industry if demand remains subdued, with COVID-19 restrictions and lockdowns in place.

"Cineworld's closure will have a devastating, significant impact in the short term to the cinema market but it's probably a sensible decision for the operator," said Rob Arthur, director of cinema consultancy firm The Big Picture.

"If you've got no revenue and you can't pay for your staff and government subsidy schemes like furlough end, it's impossible to stay open because you're essentially trading insolvently," he added.