Marks & Spencer is to cut 7,000 jobs over the next three months as it attempts to streamline the business further amid plummeting in-store sales.
The retailer said it had learnt that staff can work more flexibly and productively by multi-tasking and transitioning between its food halls and clothing and home departments to meet need.
Job losses due to Covid-19
The deployment of a technology package has also enabled it to reduce layers of management and overheads in support offices.
The roles at risk of redundancy include shop floor staff, central support centre roles and regional management positions. It expected that a significant number of people would take voluntary redundancy or early retirement.
Last month the retailer said around 950 store management and head office jobs were at risk because it needed to accelerate its restructuring.
“As part of our Never The Same Again programme [which was announced in May] to embed the positive changes in ways of working through the crisis, we are today announcing proposals to further streamline store operations and management structures,” said M&S chief executive Steve Rowe. “These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs and we are committed to supporting colleagues through this time.”
It said that it expected to create new jobs in future as its online business grew, its new ambient food warehouse was opened, and as its store portfolio was restructured.
Trading in store clothing and home departments was well below that of last year, it revealed in its trading update today. Total revenue for this area of the business was down 38.5% in the past 13 weeks and in the eight weeks since stores have reopened following the lockdown total sales have been down 29.9%. However, its online business continued to perform strongly and saw a 39.2% increase in sales on last year.
The performance of store sales has varied widely with some newer out-of-town stores trading close to last year’s level of sales in recent weeks, while town centre stores and some shopping centres saw significantly fewer customers because of social distancing guidelines.
It said the closure of many workplaces and a lack of social gatherings meant that formal wear sales were down.
Figures revealed by the Royal Society for the Encouragement of Arts, Manufactures and Commerce this week showed that 74% of furloughed retail workers had returned to work as high streets reopened. However, the Office for National Statistics has said the number of employees on payrolls fell by 730,000 between March and July, and further job losses were expected as the furlough scheme was wound down.
M&S is the latest in a long line of beleaguered businesses that have announced job cuts because of the Covid-19 pandemic. Last week, Yo! Sushi said it would close 19 restaurants and cut 250 staff as part of a restructure after signing a company voluntary arrangement with its creditors, while the West End producer of Les Misérables and Hamilton, Sir Cameron Mackintosh, made around 200 employees redundant.
Jobs at Debenhams were also suggested to be at risk after reports that its owners have drawn up plans for the department store chain’s liquidation.