Marks & Spencer has confirmed 525 jobs at its London head office will be in the firing line as it works to cut costs and improve its “complex” business operations.
The retail giant also said 400 permanent staff from its Marble Arch office would be relocated, with many IT and logistic roles moved to operations in Hemel Hempstead in Hertfordshire, and Middlesex.
The department store chain said the job cuts would be done through redundancies, reducing its number of contractors, and not filling vacancies.
A recent review showed M&S has “become too complex and inefficient”, and the company said the impending staff cuts would address this “by removing duplication, driving accountability and establishing clear, consistent processes which, in turn, will strip out unnecessary costs”.
M&S chief executive Steve Rowe said it was “never easy to propose changes” that impact employees.
“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,” he 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.”
While M&S still expected costs to rise by around 3.5 per cent this year, it said the staff cuts would lead to savings accounting to one per cent of its UK operating costs per year.
A collective consultation with employee is expected to start imminently, with the company stating it would “give careful consideration to any alternative proposals”.
Speculation about possible job losses first arose on the weekend, but an M&S spokeswoman at the time did not confirm it.
The speculation followed an announcement from the retailer on Friday that staff would receive a 14.7 per cent pay rise.
The raise came after 70,000 employees signed a petition calling on M&S to not go ahead with proposed pay cuts to offset the cost of the National Living Wage.
M&S said customer assistants would receive £8.50 an hour – or £9.65 if they work in London – from next April.
This offer is well above the living wage, which stands at £7.20 and the voluntary rate of £8.25, and £9.40 in Greater London.
However, Sunday and bank holiday pay rates will be scrapped and become standardised.
Two months ago, M&S‘ like-for-like sales in its clothing and home division dropped by 8.9 per cent, which prompted chief executive Steve Rowe to push ahead with changing the company’s pay and pension scheme.