Marks & Spencer (M&S) has announced plans to cut 500 head office jobs.
The retailer will reduce 15% of the roles at their head office in Paddington, London - with more than half of the cuts affecting contractors - in an attempt to halt a protracted slump in sales – Sky News reports.
M&S’ announcement may further deepen tensions among staff following a public row over pay. Their Chief Executive, Steve Rowe, has overhauled the pay and pension scheme, and cut premium pay for Sundays and bank holidays in an attempt to improve M&S’ finances.
However, the company said that it had completed a consultation and was offering a multi-year pay guarantee that would make staff "amongst the highest paid in UK retail and [the recipients of] one of the best benefits packages."
Sacha Berendji, M&S' Retail Director, said: "We've listened to our colleagues, acted on their feedback and are pleased that we've reached an outcome that gives enhanced support for our colleagues as well as making necessary changes to our business.
"The changes will reward our people in a fair and consistent way, simplify and modernise our business and help us attract and retain the best talent so we can continue to provide great service for our customers."
The retailer is increasing pay by 14.7% for its lowest-paid employees, to £8.50 an hour or £9.65 in London.
M&S also said that its finances will take a hit of up to £150million this year after closing its gold-plated pension scheme - This is Money reports.
Analysts predict that Rowe will also decrease store estate, as M&S’ market share in its clothing business faces intense competition from online rivals. A slump in clothes and homeware sales by 8.9% in July was branded by Rowe as “unacceptable.”
In a statement to Sky News, an M&S spokeswoman said: "We said at our full-year results in May that organisation was an area of the business that needed further consideration and that we would update on this in the autumn.
"We would never comment on rumour and speculation and have nothing further to add."
