Marks & Spencer said on Tuesday that it expects to cut 7,000 jobs over the next three months, impacting its central support center, regional management and its U.K. stores.
“As part of our Never The Same Again program 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,” Steve Rowe, CEO, said.
The Never The Same Again program was disclosed in May, where the company outlined plans to learn from the crisis and become a stronger and more agile business.
The retailer said it expects a “significant proportion” of the job cuts will be through “voluntary departures and early retirement.” The latest culling comes on top of the 950 jobs that were cut back in July as the company compressed what was a three-year turnaround plan into just 12 months following the impact from the coronavirus.
“We have also learnt that we can work more flexibly and productively with more colleagues multi-tasking and transitioning between Food and Clothing & Home. The deployment of our leading store technology package developed in partnership with Microsoft has also enabled us to reduce layers of management and overheads in the support office,” Marks & Spencer said.
While jobs will be cut, the company said it expects to create some new ones as it invests in online fulfillment and reshapes its store portfolio over the course of the year.
The headcount reduction was disclosed as Marks & Spencer provided an update on current performance. The company said apparel and home categories in stores remains well below last year, while online and home delivery were strong.
In the last eight weeks, online sales have represented 41 percent of the company’s total clothing and home sales, with the retailer noting that 68 percent of orders have been delivered to homes, versus 29 percent for the same period a year ago. In general, total revenue was down 38.5 percent in the second quarter, and in the last eight weeks since store re-openings, total sales were down 29.9 percent, although trends have been “steadily improving,” the company said. And not unexpectedly, the apparel sales mix has “seen a substantial shift from office dressing and formal wear into casual clothing and leisure wear.”
“Through upweighted promotional activity we have made good progress in clearing surplus stock,” Marks & Spencer said. “As announced at the year-end we have booked additional storage space to hibernate surplus good stock for next year.”
The headcount reduction is the latest to hit U.K. companies in the retail sector. Bankrupt Debenhams said earlier this month it would slash 2,500 jobs at its department store operations. Others cutting jobs include John Lewis, Harrods, Topshop owner Arcadia Group and Selfridges, to name a few.