John Lewis vows poor trading figures will not lead to job cuts

EXCLUSIVE

John Lewis has vowed not to make any job cuts, despite the economic slowdown influencing poor trading results, Personnel Today has learned.

Chairman of the John Lewis Partnership Charlie Mayfield insisted he would not make any “knee-jerk” reactions to staff costs just to protect short-term profit at the department store, despite the retailer announcing last week that sales across all 26 stores fell by 4.2% to £47.2m in the week to 16 August.

The results showed that 10 of the past 15 weeks have suffered due to the credit crunch, as consumers cut back on their spending. John Lewis blamed poor sales last week on customers spending more time at home watching the Olympics or away from shops opening exam results.

But Mayfield told Personnel Today: “There will be no job cuts. We are a business, we believe in pursuing a long-term approach to growing the business – we’re not into making knee-jerk cuts in staff costs just to protect short-term profit. Our ownership structure is key here, because we’re owned by our partners [employees], they want us to take a long-term not a short-term approach. Our structure means that at these times we might take a different approach to some other businesses.”

Last week the British Chambers of Commerce painted a gloomy picture for UK firms, stating the economy was heading towards a recession with 300,000 jobs to go by 2011.

But while Mayfield said the business would not axe jobs, it did need to cut back on spending to get through the tough trading period. “We’ll certainly tighten up on costs, we’re not recruiting any people right now.”

He denied there was a strict recruitment freeze, but added: “We’re not recruiting many people – only absolutely where necessary.”

The retailer would also train staff to work in the most popular departments, to make the best use of their skills. The fashion department was doing “extremely well” compared to furniture or electricals, he said, so staff could move around to work where needed.

Mayfield said: “We will take steps to train people so that we can use that across the business – at times like this, training people at one department to move into another one where we’ve got better sales growth [means] you can actually manage your demand that way.”

He added that investment in staff training would continue, despite the credit crunch, as it helped to reduce staff turnover in general.

On average, staff turnover at the John Lewis Partnership is around 20%, Mayfield said – half the retail average of 40%.