John Lewis is to axe nearly 800 jobs in its customer restaurants and store administration in its biggest ever round of redundancies.
The department store chain said it was consulting 773 people about redundancy as it attempts to cut costs and become more efficient. The cuts are the first sign of change since the department store’s managing director, Paula Nickolds, took the helm in late January.
The cuts come just weeks after Waitrose, John Lewis’s sister company, revealed plans to close six stores and remove a level of management in its supermarkets, putting nearly 700 jobs at risk.
John Lewis said it planned to centralise the administration behind its curtain and carpet estimating and fitting services, moving jobs out of stores to its office in Didsbury, Manchester.
It is also axing chefs, as it switches away from preparing food at in-store cafes in favour of having ready-made dishes delivered by external suppliers.
The retailer said it would offer workers alternative roles, but the majority of those affected by the changes are expected to leave. It will create 386 jobs in the new central administration hub and in cafe customer service roles.
Carpet estimators and fitters will not be affected by the job cuts but will now work for customers who buy online and from the high street outlets.
In an effort to reduce costs, the group shut some staff canteens about a year ago and introduced longer shifts for delivery drivers. The new job cuts are the biggest since 2009 when 700 in-store call centre employees were made redundant, and will be a blow to John Lewis’s benign, paternalistic image.
The changes come amid falling profits at the department store group. Operating profits slumped 31% despite a 4.5% rise in sales in the six months to the end of July as the company invested heavily in equipment to support its online business and increasing pay for staff.
The John Lewis group – which includes Waitrose – said last month its annual bonus for staff, known as “partners” because they own the company collectively, would fall significantly this year and that staff numbers would drop after operating profits dived 58.3% to £113.7m in the six months to the end of July.
Last year the staff bonus – which is the same percentage of salary for all workers, from the chairman to Saturday shelf-fillers – was 10%, the lowest for 13 years. This year’s lower bonus will be unveiled on 9 March, along with the retailer’s annual results.
Dino Rocos, operations director at John Lewis, said: “Our partners are passionate about offering the very best customer service and these proposals will allow us to modernise our business as it adapts to the changing needs of our customers and the role that shops play in their lives.
“The proposed new structure will allow us to harness partners’ knowledge and skills, giving them more scope to be in the right place at the right time to deliver great service to our customers when and where it’s needed. We understand that for some this will mean a period of change, and we are working with affected partners over the consultation period to give opportunities for redeployment in new roles wherever possible.”
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