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525 jobs to go at M&S head office in cost-cutting drive

Published 05/09/2016

The cuts come less than two months after M&S chief Steve Rowe branded the performance of its clothing and home arm 'unacceptable'
The cuts come less than two months after M&S chief Steve Rowe branded the performance of its clothing and home arm 'unacceptable'

Marks & Spencer has confirmed it will be axing 525 jobs at its head office in a bid to cut costs.

The company said 400 permanent staff from its central London office will be relocated, with a number of IT and logistic roles moved to operations in Hemel Hempstead in Hertfordshire, and Middlesex.

The retailer said it plans to make the cuts through redundancies, reducing the number of contractors it works with, and "natural attrition" - not filling vacancies.

It comes less than two months after the retail giant's chief executive branded the performance of its clothing and home arm "unacceptable" after like-for-like sales plummeted 8.9%.

M&S chief executive Steve Rowe said: "It is never easy to propose changes that impact on our people, 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 added: "M&S has to become a simpler and more effective organisation if we are to deliver our plans to recover and grow our business."

The company said the staff cuts would result in significant savings amounting to about 1% of its UK operating costs per year.

Marks & Spencer said it still expects costs to rise by around 3.5% this year.

A recent company-wide review showed the company has "become too complex and inefficient".

Staff cuts would address this problem "by removing duplication, driving accountability and establishing clear, consistent processes which, in turn, will strip out unnecessary costs", said M&S.

The company said it will start collective consultation with employees, and would "give careful consideration to any alternative proposals".

It comes after Mr Rowe announced changes to the company's pay and pension scheme - cutting premium pay for Sundays.

The move prompted 70,000 people to sign a petition calling on the chain to scrap proposed pay cuts to offset the cost of the National Living Wage.

Last week, M&S announced that staff would receive a 14.7% pay rise under an improved offer following the campaign against the company.

Customer assistants are expected to receive £8.50 an hour - £9.65 in London - from next April, well above the living wage of £7.20 and the voluntary rate of £8.25, and £9.40 in the capital.

However, premium payments for Sunday working will stop, and there will be one standard payment for bank holidays.

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