A major restructuring at Marks & Spencer, which will include 525 job cuts at its London head office, will have no impact on the retailer’s Irish business, the group has confirmed.
As new chief executive Steve Rowe seeks to streamline the business and reduce costs, the company also announced plans to reduce the number of roles permanently based in central London by about 400 across its IT and logistics functions.
It said the planned reduction in jobs, which follows a review of M&S’s organisational structure, would be achieved through a combination of fewer contractors, natural attrition and redundancies for M&S employees. A formal consultation with affected staff will now begin.
“M&S has to become a simpler and more effective organisation if we are to deliver our plans to recover and grow our business,” said Mr Rowe.
“M&S has become too complex and inefficient, and today’s proposals aim to address this by removing duplication, driving accountability and establishing clear, consistent processes; which in turn will strip out unnecessary costs.”
A spokeswoman later confirmed the changes would not impact on the Irish business.
Shares in M&S, down 29 per cent over the last year, were down 0.7 per cent at 352 pence in London earlier Monday.
Clothing business
Mr Rowe, a 26-year M&S veteran who succeeded
Marc Bolland
as chief executive in April, has pledged to turn around M&S’s struggling clothing business by improving ranges and availability, cutting prices and offering fewer promotions.
However, his plan, outlined in May, came with a warning of a short-term dent to sales and profit, and in July the 132-year-old group reported its worst quarterly clothing sales for a decade.
The proposed reduction in head office roles comprises existing vacancies, about 260 M&S roles and about 200 contractors.
M&S currently employs over 3,500 in seven UK head offices. Its more than 71,000 staff in UK stores and supporting customer functions will not be affected by the proposed changes.
Cost base
M&S said if the proposals go ahead they would deliver annualised operating cost savings of about 1 per cent of the UK cost base.
Its cost growth guidance for the current 2016-17 fiscal year remains unchanged at about 3.5 per cent. However, there would be a one-off cost of £15 million (€17.9m), which includes the changes to the senior management team Mr Rowe announced in May.
The job-cut plans come days after M&S announced a 14.7 per cent pay rise for shop floor staff but cut premium pay for Sundays and changed the company’s pension scheme.
Mr Rowe said in May M&S's other big issues, including the size of its UK store estate and international plans, would be addressed in the autumn. – PA
