John Lewis Partnership has hinted that it could make job cuts across the business after it slashed its redundancy payouts.
The employee-owned retailer told partners this week it was halving its current two-week redundancy pay per year of service policy as it was “higher than typical market practice and comes at a very high cost”.
The Waitrose owner offers “partnership redundancy pay” on top of statutory pay, which is set by the government.
John Lewis told staff via an internal memo, seen by The Telegraph, that “the high cost of redundancy pay has been one of the things that’s prevented us from moving as quickly as we’ve wanted to transform ourselves for the future, and has restricted our ability to invest more in pay”.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
The retailer said it needed to make the policy “more affordable” to “free up cash” it needed to support its turnaround plan.
It said most of its staff would not be affected by the changes and reassured partners that redundancies were a “last resort”.
A John Lewis spokesman said the Partnership offered a “generous and attractive range of benefits that includes a redundancy package, which will continue to be above the market”.
They added: “We’re making changes as a high proportion of our current benefits package is weighted towards partners after they have left, when we want to better reward those currently working for us.
“These changes will allow us to invest more in our partners still within the business.”
Last week, it was revealed that John Lewis’ senior management had proposed changes to “reset” the business’ current pay policy.
Under its proposals, the partnership’s bosses would be handed more power to control performance-linked pay rises resulting in staff facing smaller pay rises.
Click here to sign up to Retail Gazette‘s free daily email newsletter
