German department store chain Karstadt will cut 2000 jobs over the next two years as part of a move to streamline the business.
The jobs, which represent 10% of its 22,000 workforce, will go across all departments and full and part time employees. Chief executive Andrew Jennings said it would focus on early retirements, non-extension of temporary contracts and voluntary exits in the first instance but that he had not decided exactly which jobs will go as yet.
The job cuts are part of Jennings’ “Karstadt 2015” strategy, which aims to modernise the 89-strong chain. He will also be bringing in new labels, boosting merchandising teams and revamping stores.
Karstadt was bought out of insolvency by investor Nicholas Berggruen in 2010. Jennings joined the business in December of that year. As part of the bankruptcy deal, the retailer agreed not to cut its workforce and, instead, reduce salaries and cut bonuses. This agreement ends in September.
Jennings said that the chain had achieved a lot in the first 18 months, which has seen €160m invested in updating stores, technology and infrastructure, but that still had more to do.