Whitbread has today revealed it has cut 250 jobs from its head office in Luton.

The swathe of senior management redundancies was part of a strategy to establish a ‘new and leaner organisation structure’ according to chief executive Alan Parker, who said the cuts will lead to annual savings of £25m by 2007/8, for an initial restructuring cost of around £25m.

The move will see Whitbread’s brands – which include Premier Travel Inn, Costa Coffee and David Lloyd Leisure – sharing central services such as human resources, property, finance, information systems and communications.

In the company’s first half interim results, posted this morning, Parker said that trading continues to be challenging, adding that although occupancy levels at Premier Travel Inn were high and DLL membership levels were stabilising, reversing the ‘disappointing’ sales trends of its pub restaurants ‘will take time’.

Pre-tax profits for continuing operations were up 11 per cent to £102.9m with continuing sales growth up 13.4 per cent, largely due to the Premier Lodge acquisition.

The company has also returned £400m to shareholders following proceeds of £700m from the sale of Marriott hotel assets earlier this year and a further £55m from the sale of the Brewery site in London. Total asset sale proceeds are expected to reach £1.3bn, which will see a further £400m returned to shareholders via a market share buy back programme commencing today. A further £290m will be used to fund the pension deficit.

“After such a major programme of asset rationalisation the size and shape of Whitbread’s continuing business is our platform for future growth,” said Parker.

“We have leading brands in growth markets and our task is to deliver consistent improvements in operating performance of each of our businesses. We can see significant opportunity and are confident we can achieve this for the benefit of our shareholders.

“In the period good progress has been made but there is still more work to be done.”