M&S to slash 500 head office jobs after sales slide

New chief plans cuts and store closures to reverse slump

MARKS & Spencer will cut 500 head office jobs this week as part of a radical turnaround plan by its new chief executive Steve Rowe.

The redundancies will amount to 15 per cent of workers at its head office in Paddington, London.

The retail giant employs 3,500 staff at its headquarters and 90,000 nationally. Half the job losses, due to be announced in more detail later this week, are expected to be contractors. The job losses come as the group battles to revive falling clothing sales and stagnant profits.

Rowe, who ran M&S’s successful food business for three years, was promoted to replace former chief executive Marc Bolland only five months ago, but is already making radical changes.

He announced a review of management responsibilities just a month after he took charge and has taken personal responsibility for the firm’s shrinking clothing business.

Last month Marks & Spencer also drafted in a new advertising agency, Grey London, to run its £60million account ending its 16-year relationship with Rainey Kelly Campbell Roalfe/Y&R.

The review of the head office is part of a strategic overhaul of the firm ahead of a wider business plan that Rowe will announce to investors in November.

It is expected to include a plan to close poorly performing stores, a review of the international division and a frank assessment of the firm’s clothing business which has struggled to grow sales for many years.

Asked to comment on the head office cuts a spokesperson for M&S said: ‘We said at our preliminary results in May that organisation was an area of the business that needed further consideration and that we would update on this in the autumn. We would never comment on rumour and speculation and have nothing further to add.’

Meanwhile on Friday Marks & Spencer announced a fresh plan to overhaul staff pay and benefits. Earlier proposals, designed to deal with the new National Living Wage had come under fire from worker representatives and MPs.

The company’s retail director Sacha Berendji said the latest plans followed consultation with staff and would mean M&S workers were ‘amongst the highest paid in UK retail and receive one of the best benefits packages’.

But MP Siobhain McDonagh, who has campaigned against firms trimming benefits to help fund new minimum wage targets, said thousands would still lose out.