M&S axes 7,000 jobs as Covid-19 impact speeds shift from high street to online
Covid-19 has “super-accelerated” a major overhaul of highstreet stalwart Marks & Spencer, which has announced it will axe 7,000 staff over the next three months.
Business experts say the retailer has been suffering from a long-term decline due to a failure to respond to major shifts in shopping trends towards online ordering.
“Today’s announcement, while difficult for the staff involved at M&S, has been a long time in the making,” said John Moore, senior investment manager at financial planningfirmbrewindolphin.
“The measures taken today underline the degree to which the economic impact of the virus has super-accelerated many of the trends that were already sweeping through retail and other sectors.
“The hope will be that M&S, one of the UK’S most iconic brands, emerges from this process a stronger, more future-proof business on the other side – but the next few months will be tough for the company and its staff.”
Sophie Lund-yates, equity analyst with Hargreaves Lansdown, added: “M&S has realised it needs to act now if it wants to secure the longevity of the business.
“Coronavirus has exacerbated existing fault lines – namely that shopping habits have changed and M&S has been slow off the mark meeting those shifting demand patterns.
“An added blow from the current crisis is that the type of clothes we’re after has changed too, and not in M&S’S favour. Consumers are more interested in leggings than a new office outfit these days.”
M&S has said the bulk of cuts will be made across its stores, hitting around 12 per cent of its 60,000 shop-based staff, as well as a smaller number of support centre and regional management workers.
The roles are set to go over the next three months as M&S ramps up its overhaul, dubbed Never the Same Again.
The job losses add to many thousands already announced across the retail sector as the pandemicwreakshavoconthe UK’S high street, with department store chain Debenhams last week announcing another 2,500 staff cuts.
M&S expects a “significant” number of roles will be cut through voluntary departures and early retirement, while it said it will also create some jobs through investing further in online warehousing and a new ambient food warehouse.
The group’s latest staffing cull follows 950 jobs losses announced just last month across store management and head office roles.
But it insisted there were no new updates on store closures as it ploughs on with an ongoing review of its shop estate.
The latest round of cuts come as M&S revealed total sales in its hard-hit clothing and home arm have plunged by 29.9 per cent in the eight weeks since shops reopened, with store sales tumbling 47.9 per cent and online sales surging 39.2 per cent.
It said sales declines were improving but that it was “clear that there has been a material shift in trade”.
“Whilst it is too early to predict with precision where a new post-covid sales mix will settle, we must act now to reflect this change,” the firm said.
The group said the pandemic had shown staff can work “more flexibly and productively” and are able to multi-task and move between food, clothing and home departments.
Chief executive Steve Rowe added: “As part of our Never the Same Again programme 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.”
Cuts at Marks & Spencer mean 41,000 UK jobs lost
Marks & Spencer’s latest mammoth jobs cull brings the total number of cuts and roles at risk in Britain’s battered retail sector to more than 41,000 since the start of the pandemic.
According to figures compiled by the PA news agency, the retail bloodbath has claimed or put under threat at least 41,391 UK jobs since the lockdown in late March.
The coronavirus crisis has sparked a swathe of shop closures, having rapidly speeded up the shift to online shopping and as consumer uncertainty has taken its toll.
The 7,000 jobs being axed at M&S - the majority of which are store staff - add to 2,500 announced last week by troubled department store chain Debenhams.
And last night Pizza Express announced plans to
By Holly Williams