G8 Education (ASX:GEM) plans to suspend the operation of around 40 of its centers as a result of an assessment of its network, according to a Wednesday Australian bourse filing.

It will transition customers to one of the nearby centers and, where possible, redeploy team members. The firm will then consider longer-term options for those centers, including lease surrender, divestment, or other alternatives.

The firm will also reorganize its support office structure and reduce its cost base.

Its current spot occupancy as of April 24 came in at 56.4%, down 7% year-over-year, while year-to-date occupancy was 56.1%, down 7.9% versus the prior corresponding period.

Occupancy across the early childhood education and care sector is lower compared to previous years due to sustained affordability pressures, falling birth rates, increased long-day care supply, and confidence impacted by serious child safety incidents, the filing noted.