Marks & Spencer will axe 7,000 jobs across UK stores in the next three months sending total number of roles lost in battered retail sector during covid crisis to more than 41,000
- M&s jobs will go across shops, regional management and its support centre
- It expects many roles to be cut through voluntary departures or early retirement
- But some jobs will be created through investing further in online warehousing
- Total sales in clothing and home fell 29.9% in eight weeks since shops reopened
Marks & Spencer today announced it will axe 7,000 jobs as part of a further shake-up of its stores and management in the face of the coronavirus crisis.
The London-based retail giant revealed the bulk of the cuts would be made across its stores, hitting around 12 per cent of its 60,000 shop-based staff, as well as a smaller number of support centre and regional management workers.
M&S, which employs 85,000 people worldwide, expects a 'significant' number of roles will be cut through voluntary departures and early retirement.
The group said it will also create some jobs through investing further in online warehousing and its new ambient food warehouse.
M&S had already begun a significant restructuring before the pandemic hit, shutting under-performing stores and boosting its online sales.
The coronavirus outbreak has now accelerated those plans.
The job losses add to many thousands already announced across the retail sector as the pandemic wreaks havoc on Britain's high street, with department store chain Debenhams last week announcing another 2,500 staff cuts.
It brings the total number of cuts and roles at risk in Britain's battered retail sector to more than 41,000.
Marks & Spencer has said it plans to cut around 7,000 jobs over the next three months
According to figures compiled by the PA news agency, the retail bloodbath has claimed or put under threat at least 41,391 UK jobs since the lockdown in late March.
Almost 100 more workers are also set to lose their jobs at Bombardier's aircraft manufacturing plant in Belfast.The company announcement of 95 potential redundancies comes two months after it announced more than 600 jobs were to be lost at its operations in the east of the city - 400 core staff and 200-plus contractors.
It has been predicted some 6.5 million jobs in total will go in the UK because of the coronavirus disaster.
It has led to calls for a targeted support scheme for the sector amid concerns the Government's action will not be enough to save jobs or specifically help or retrain those in retail who have lost their roles.
The Government's furlough scheme for workers comes to an end in October and while it has launched the back to work bonus, offering firms £1,000 for every furloughed staff member a business retains, there are fears there will still be thousands more retail jobs axed.
Chancellor Rishi Sunak unveiled his Plan for Jobs in the summer statement alongside a 15% cut in VAT to add to the 100% business rates relief already available for eligible businesses.
It comes as M&S revealed total sales in its hard-hit clothing and home arm plunged 29.9 per cent in the eight weeks since shops reopened.
| DEPARTMENT | 19 WEEKS TO AUGUST 8 | 13 WEEKS TO AUGUST 8 | 8 WEEKS TO AUGUST 8 |
|---|---|---|---|
| Clothing & Home | -49.5 | -38.5 | -29.9 |
| Food | -1.1 | 2.5 | 2.5 |
| International | -31.9 | -24.6 | -19.9 |
| Group | -19.2 | -13.2 | -10 |
| Clothing & Home.com | 32 | 42.2 | 39.2 |
| M&S.com | 38.9 | 46.9 | 40.7 |
Store sales fell 47.9 per cent but online surged 39.2 per cent. It said sales declines were improving but that it was 'clear that there has been a material shift in trade'.
It comes ahead of a new partnership between M&S and Ocado, set to launch next month.
The venture will see M&S products become available on the online supermarket from September 1.
With online sales surging amid lockdown, the partnership is expected to be a significant boon to the business.
A spokesman said: 'Whilst it is too early to predict with precision where a new post-Covid sales mix will settle, we must act now to reflect this change.'
The group said the pandemic had shown staff can work 'more flexibly and productively' and are able to multi-task and move between food, clothing and home departments.
The group's latest jobs cull follows 950 jobs job losses announced just last month across store management and head office roles.
But it insisted there were no further updates on stores closures as it ploughs on with an ongoing review of its shop estate.
Chief executive Steve Rowe added: 'As part of our Never the same again programme 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.
'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.'
In May, Mr Rowe revealed plans for his Never the same again restructure overhaul as he warned some shopper habits had 'changed forever'.
Its latest trading update showed a mixed performance across stores, with those in newer out-of-town locations almost back to pre-Covid sales levels, but town centre shops and some shopping centres still 'heavily impacted' by social distancing.
Reacting to the news, Lucy Powell, Labour's shadow minister for business and consumers, said: 'These job losses are devastating for the workers involved yet they also tell a much bigger story about the threat to our high streets.
'The scale of job losses was not inevitable but the incompetence of this Government means we're now seeing wave after wave of redundancies and store closures.
'Labour has called for a hospitality and high streets fightback fund to support businesses in distress and to save jobs now. Ministers must change course.'
Freddy Khalastchi, business recovery partner at accountancy firm, Menzies LLP, said: 'The scale of these cuts demonstrates that M&S means business. This is not just about cost cutting, it is about repositioning the business for growth in a market that has demonstrably changed for good.
'Consumer shopping habits have transformed during the pandemic.
'As a result, many bricks and mortar retailers have been forced to take drastic action to rightsize their business models by stripping away superfluous layers of management and back office support services. 'Coming on top of 950 job losses announced last month by the retailer, this development is a significant step that may well encourage others to bring forward radical restructuring plans in the next few months.'
Julie Palmer, partner and restructuring expert at Begbies Traynor, said: 'This M&S announcement will rock the retail sector.
'But the reality is that the moves M&S is having to make will likely be echoed across the retail sector for brands that have not undergone huge structural change before the pandemic lockdown.
'This is a huge transformation for the brand that is being rolled out. And one that is needed because consumers have become used to the convenience of shopping during lockdown.
'The movement of shop floor jobs to warehouse jobs, stronger emphasis on logistics and a greater wealth of talent that can support the online offering will be where the jobs in retail start to appear.
'The increase in technology in the workplace to streamline organisations will also become more commonplace as retail moves towards its future structure.
'This change may seem drastic, but it has been on the cards for a long time and the coronaconomy has forced the hand of the leadership to accelerate the process. M&S needs to survive and bending to the consumer demand is the way to do that. Hopefully this will strengthen the company for the future.'
It comes as almost 100 more workers are set to lose their jobs at Bombardier's aircraft manufacturing plant in Belfast.
The company announcement of 95 potential redundancies comes two months after it announced more than 600 jobs were to be lost at its operations in the east of the city - 400 core staff and 200-plus contractors.
Bombardier announced the further redundancies on Tuesday afternoon.
The job losses announced in June were part of Bombardier plans for 2,500 redundancies across its worldwide aviation operations.
Around 14,000 jobs could also be on the brink at Debenhams.
Plans to liquidate the business are being drawn up in case other options for saving the company – such as selling it – fall through.
If the ailing department store chain collapses – and all 14,000 jobs are lost – it would be the single biggest cull of the coronavirus crisis.
This would bring the total number of potential UK job losses to more than 180,000 since the pandemic began – adding to misery hitting firms from Virgin Atlantic to NatWest, British Gas-owner Centrica and luxury car maker Aston Martin.
British Airways has so far announced the largest cull, signalling that it may have to cut as many as 12,000.
The likes of Laura Ashley, Cath Kidston and Oasis are among the other big-name brands that have collapsed this year.
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