Marks & Spencer’s proposal to cut around 525 head office roles will not solve inherent problems at the retailer, industry insiders have warned.
Marks & Spencer
M&S, which came under fire earlier this year when it announced an 8.9% slump in clothing and homeware sales, said a detailed internal review had concluded that the company has become “too complex and inefficient”.
It argued that the proposed cuts would remove duplication, increase accountability and create clearer processes at its Paddington head office.
It is also planning to reduce the number of IT and logistic roles based permanently in central London by 400. Cuts would be made through a mixture of redundancies, a reduction in contractors and natural attrition, while some roles would be redeployed elsewhere in the UK.
The changes are expected to save 1% of its UK cost base.
Reaction to the proposals was mixed. One menswear source close to the retailer said the changes could be risky in such a competitive market.
“I don’t know if it is the right thing to do,” he said. “Retail is very competitive, and you need to get that detail and service right in terms of online and logistics, so cutting back [on staff] might lead to disappointed customers. Product is one thing, but if you don’t invest in customer service, you won’t deliver to expectations.”
“The truth is you can make all the cuts in the world but, if your product is wrong, it’s irrelevant,” argued one recruitment source. “I’m hearing mixed reports on [chief executive] Steve Rowe’s strategy. A lot of people think he should have waited to see how the autumn product went before cutting jobs.”
One supplier agreed: “M&S has been trying to improve product for some time and it’s not quite there yet. Cutting 500 jobs is not going to make anyone in retail feel more confident.”
However, she added: “I do think the cuts will help. There are far too many people there at the moment and it’s a miracle they get anything done.”
Another headhunter said: “One of the biggest problems M&S has is most people are lifers and there is a ceiling on how far new recruits can go.
“Steve [Rowe] recognises there is a gap in talent at the top. They might be letting people go but there will be more recruitments made at a senior level, he is sorting out the development of future talent.”
Customer assistants will get a 14.7% pay rise to £8.50/hour and £9.65 in Greater London from April 2017, and there will be pay rises for section co-ordinators and section managers, but the retailer is removing premiums for Sunday working and moving to a standard payment for bank holidays.