Marks & Spencer has confirmed it is consulting with employees on plans to cut around 525 head office roles as part of chief executive Steve Rowe’s turnaround plans for the struggling retailer.
The suggested changes to head office jobs would also reduce the number of IT and logistic roles based permanently in central London by 400. The cuts would be made through a mix of redundancies, fewer contractors and natural attrition.
M&S said a detailed internal review had revealed the company has become “too complex and inefficient” and argued the proposals would remove duplication, increase accountability and create clearer processes at its Paddington head office.
The retailer also expects the changes to save 1% of its UK cost base.
The head office restructure, combined with changes to the senior management team made earlier this year, will result in a non-underlying cost of £15m.
Rowe said: “M&S has to become a simpler and more effective organisation if we are to deliver our plans to recover and grow our business. It is never easy to propose changes that impact on our people, but I believe that the proposals outlined today are absolutely necessary and will help us build a different type of M&S – one that can take bolder, pacier decisions, be more profitable and ultimately better serve our customers.
“We remain committed to investing in store staffing and improving our customer experience and therefore our store colleagues are not affected by this proposal.”
As Drapers reported last week, M&S is also pushing forward with plans to scrap higher wages for Sunday and bank holiday shifts, despite protests from some staff. Customer assistants will get a 14.7% pay rise to £8.50 per hour and £9.65 in Greater London from April 2017 and there will also be pay rises for section co-ordinators and section managers.
In the year 2019-20, staff still set to earn less as a result of the changes will receive an additional top-up payment and be offered more hours.
M&S came under fire earlier this year when it announced an 8.9% slump in clothing and homewear sales, which it blamed on difficult trading conditions and reduced promotional activity.
Rowe, who took the reins at the company in May, has previously vowed that, under his stewardship, M&S will return to growth by improving clothing fit and quality, streamlining ranges and improving availability.
The retailer could also pull out of many of its international markets following an ”unsustainable” slip in profits.