NEWS

M&S to cut 7,000 jobs over the next three months

Published on: 18th August 2020

M&S said it hoped a “significant proportion” of the job cuts will be voluntary redundancy and early retirement.

M&S job cuts

Marks & Spencer is undergoing 7,000 jobs cuts over the next three months across its stores and management following a difficult trading period. It said the coronavirus pandemic had made it clear there had a been a “material shift in trade”.

M&S said it hoped a “significant proportion” of the job cuts will be voluntary redundancy and early retirement.

In-store sales of clothing and home goods have been low compared to 2019, although online and home deliveries are strong. In a statement, M&S said it was “too early to predict with precision where a new post-Covid sales mix will settle. We must now act to reflect this change.”

The company also noted that operating during the pandemic had showed it could work “more flexibly and productively”, with more staff multi-tasking and moving between departments.

Total sales in clothing and home have plunged 29.9% in the eight weeks since shops reopened, with over all store sales falling by 47.9%, whilst online sales surged at 39.2%.

Last month the retailer announced 950 store management and head office jobs were at risk because it needed to accelerate its restructuring.

Alongside this week’s announcement of more job cuts, chief executive Steve Rowe commented: “In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever. Three months on and our ‘Never the Same Again’ programme is progressing; albeit the outlook is uncertain and we remain cautious.”

He said the proposals to “further streamline store operations and management” were an “important step in becoming a leaner, faster business set up to serve changing customer needs.”

The job cuts are the latest to affect a troubled retail sector, as companies strive to move forwards in a new and unpredictable trading environment.

Retail Economics chief executive, Richard Lim, said the cuts represented a “massive reduction” in the M&S workforce, commenting: “Retailers were already battling with the pace of structural change facing the sector but the impact of the pandemic has been a step-change for the industry. Retailers remain in survival mode, preserving cash and hanging on for more sustainable levels of demand to return.”

He added: “But the way we shop has changed on a permanent basis for many parts of the sector almost overnight. The reality is that many more retailers will fail and the number of job losses will ramp up as government support is withdrawn. This is the calm before the storm.”

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