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M&S to Cut 7,000 Jobs as Virus Crisis Piles Pressure on Retail Sector

Written by: Keith Tully

M&S storeMarks & Spencer has announced plans to cut 7,000 employees from its workforce over the course of the next three months.

The move is being made in response to a “material shift” in performance across the retailer’s UK stores, where sales are substantially down on 2019 levels.

Online sales and demand for home deliveries has been strong in recent months but the pandemic and the associated lockdown have taken a major toll on M&S’ overall performance.

Cutting 7,000 jobs would represent around a 10 per cent reduction in the overall size of M&S’ workforce and follow on from the company saying in July that up to 950 store management and head office positions were at risk.

Steve Rowe, M&S’ chief executive, has said he is aiming to transform the business by making it “more agile” and responsive in a world that has seen some customer habits “changed forever”.

Retailers have been forced to change the way they function and provide services to customers in quite radical ways since the beginning of the coronavirus crisis and M&S’ restructuring is in part a response to what’s been learned throughout that process.

Statements from the company explain that more of its staff will be multi-tasking and moving between different departments in future, with the expectation being that demands placed on retailers will be changed permanently because of the pandemic.

Julie Palmer, a partner and restructuring expert at Real Business Rescue, says that while the announcement of 7,000 job cuts will shock the retail sector, many more brands will need to undergo similar processes of transformation if they are to compete and thrive in the post-pandemic world.

“This is a huge transformation for the M&S brand that is being rolled out and one that is needed because consumers have become used to the convenience of shopping during lockdown,” Ms Palmer has said.

“This change may seem drastic, but it has been on the cards for a long time and the corona-economy has forced the hand of the leadership to accelerate the process,” she added.

“M&S needs to survive and bending to the consumer demand is the way to do that. Hopefully this will strengthen the company for the future.”

Keith Tully

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Keith Tully
Partner

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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