Marks & Spencer PLC (LON:MKS) has said it is to cut a further 7,000 jobs across all parts of the business as part of its streamlining process.
The retailer was already in the middle of a restructuring that will see 950 jobs go but said there had been a material shift in trading since May when stores reopened after the coronavirus pandemic lockdown.
NEW: M&S's 10% job cuts add to dire few weeks for retail sector
“We have also learnt that we can work more flexibly and productively with more colleagues multi-tasking and transitioning between Food and Clothing & Home,” the retailer said in a statement.
Jobs will go the support centre, in regional management, and in UK stores, reflecting the fact that the change has been felt throughout the business, it said, though it added it expects a significant proportion will be through voluntary departures and early retirement.
Some new jobs will also be created in online fulfilment and the new ambient food warehouse and through a reshaped store portfolio, it added.
Sales in the latest quarter highlighted the additional problems in Clothing and Home brought on by the pandemic.
Group sales fell by 13.2% in the 13 weeks to August 8, 2020, as a 38.5% fall in Clothing and Home offset a 2.5% improvement in food.
In the last eight weeks of the period there was an improvement in both arms, M&S said, and notably in Clothing & Home where the rate of decline dropped to 29.9%.
In food, M&S said the supply agreement with Ocado Retail is on track for September adding it is beginning to see the benefits in trading terms and the launch of over 500 new products.
In the statement, Steve Rowe, M&S chief executive, said: "In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever.
"Three months on and our Never the Same Again programme is progressing; albeit the outlook is uncertain and we remain cautious.
"As part of our Never The Same Again programme to embed the positive changes in ways of working through the crisis, we are today announcing proposals to further streamline store operations and management structures.
"These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs and we are committed to supporting colleagues through this time."
Time to act now
“M&S has realised it needs to act now if it wants to secure the longevity of the business," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown:
"Coronavirus has exacerbated existing fault lines – namely that shopping habits have changed and M&S has been slow off the mark meeting those shifting demand patterns.
"An added blow from the current crisis is that the type of clothes we’re after has changed too, and not in M&S’ favour. Consumers are more interested in leggings than a new office outfit these days.
No business ever wants to put its workforce through mass redundancies, but these streamlining efforts are necessary given the challenges. It stands to reason that having colleagues that are able to switch between the Clothing floor and Food Halls will be good news for efficiency."
Shares dropped 3.3% to 109.5p.
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