Nearly 4000 retail employees have lost their jobs this financial year already as major retailers make cut backs to offset rising wage pressures.
According to the Financial Times, 3700 low-skilled jobs have been cut from major retail chains, as companies replace their roles with automated technology.
One major retailer told the FT that increasing the National Minimum Wage was forcing them to replace workers: “Automation that used to be too expensive is now cheaper than the people it can replace.”
Both Sainsbury‘s and John Lewis announced plans to axe around 400 jobs, with the former also making major changes to around 4000 employees‘ working hours.
The incremental increase of the National Minimum Wage, set to rise from £7.20 to £7.50 in next month, has been red flagged by many retailers who employ around 1.7 million people paid roughly the minimum wage.
Tesco‘s £505 million operating profit for last year, for instance, would have been completely wiped out following a 12 per cent increase in wages according to the FT.
The Office for Budget Responsibility has stated that up to 60,000 job losses could occur by 2020.