The John Lewis Partnership is axing up to 1,500 head office jobs by April next year as part of its plans to transform the ailing department store business.
In a shock move earlier this year, the group shut eight of its John Lewis stores for good, putting 1,300 people at risk of losing their jobs.
JLP said the latest head office cuts were necessary to save an extra £50million on top of £50million worth of savings already made, out of a cost-cutting target of £300million.
Job losses: The John Lewis Partnership is axing up to 1,500 head office jobs by April next year
‘This is a difficult decision for the Partnership to make and we will be consulting with affected Partners about the proposals’, JLP said.
It added: ‘Wherever possible, we will seek to find new roles in the Partnership for Partners whose roles become redundant.’
The group said that partners who cannot be redeployed or find new jobs will be provided with a ‘market leading redundancy support and funds for retraining’.
This includes up to £3,000 towards a recognised qualification or course for up to two years for any Partner with two years’ service or more.
The group’s main John Lewis head office is at Victoria Street in central London, while the Waitrose base is in Bracknell, Berkshire.
In its statement today, JLP also revealed that its finance director, Patrick Lewis, had ‘decided to leave the Partnership at the end of this year’ following a 26-year career with the business.
Mr Lewis is being replaced by Bérangère Michel, who is currently the group’s customer service executive director and the group’s former finance boss.
JLP said it also planned to ‘reduce’ the size of its executive team, meaning it will not be hiring a new customer service director.
Instead those responsibilities will transfer to James Bailey, executive director for Waitrose and Pippa Wicks, executive director for John Lewis.
Sharon White, chairman of JLP, said: ‘Our Partnership Plan sets a course to create a thriving and sustainable business for the future. To achieve this we must be agile and able to adapt quickly to the changing needs of our customers.
‘Losing Partners is incredibly hard as an employee-owned business. Wherever possible, we will seek to find new roles in the Partnership and we’ll provide the best support and retraining opportunities for Partners who leave us.’
Store closures, cost-cutting, price cuts and job losses
Since new JLP boss Sharon White took the helm in February this year she has ploughed ahead with plans to transform the department store group into a thriving and profitable business again.
In September, fresh figures revealed that JLP swung to a half-year loss in the six months ending 25 July and confirmed that staff bonuses will not be paid this year.
For the interim period ending 25 July JLP, which includes John Lewis and Waitrose, made a pre-tax loss of £635million, marking a dramatic downturn in fortunes considering it generated a £192million half-year profit at the same point a year ago.
Closed for good: One John Lewis store in Birmingham will never be reopened
Gone: The John Lewis store in Watford has now permanently closed its doors
Gone for good: The John Lewis shop in Newbury will be staying shut
Last month, JLP unveiled details of its ‘five-year plan’ aimed at generating profits of £400million by 2025.
Under the ‘Partnership Plan’ the retailer said it would continue to adapt to changing shopping habits by expanding digital, virtual and delivery services in a bid to ‘get closer to customers.’
John Lewis did not make any much-mooted changes to its ‘Never Knowingly Undersold’ price promise last month, instead noting that ‘substantial customer research is under way to inform our new value pledge, which will be announced next year. Never Knowingly Undersold remains in place until then.’
As part of its turnaround plan, JLP decided to permanently close eight of its stores across the country, putting 1,300 jobs at risk. The coronavirus pandemic has rapidly accelerated the downturn in fortunes for many of Britain’s traditional bricks-and-mortar based retailers.
Profits: John Lewis Partnership profit numbers up until last year, provided by MarketLine
On the slide: John Lewis Partnership bonus payments through time up until last year
The eight John Lewis stores staying shut for good are located in Croydon, Watford, Heathrow Terminal Two, St Pancras International railway station, Birmingham, Swindon, Tamworth and Newbury.
Eight John Lewis stores staying shut for good
3. Heathrow Terminal Two
8. St Pancras railway station
The closure of John Lewis’ vast 136,000 sq ft outlet in Birmingham was perhaps the the biggest surprise. The store only opened in 2015 as part of the £750million Grand Central scheme around Birmingham New Street train station after years of local anticipation.
The retailer said the permanent closures were necessary to ‘secure the businesses’ long-term future and respond to customers’ shopping needs.’
The eight shops being permanently shut were already ‘financially challenged’, John Lewis said, with customers shifting away from stores towards shopping online quicker than expected as a result of the pandemic.
The retailer thinks that between 60 per cent and 70 per cent of John Lewis sales will be made online this year and next, compared with 40 per cent before Covid-19 hit.
The shift towards online has seen the company double capacity at its Waitrose supermarket arm, while it also plans further investment in John Lewis’s online business. But, Ms White has previously stressed that bricks-and-mortar stores still had a ‘vital role’ to play within John Lewis’ business model.
M&S suffers first loss in 94-year history
This year is turning into something of a nightmare for many retailers, and with a second lockdown getting underway tomorrow, the outlook continues to look bleak.
Today, high-street stalwart Marks & Spencer revealed it sank to the first loss in its 94 years as a publicly-listed company as the coronavirus pandemic hit trading.
In the six months to 26 September, the retailer made a loss of £87.6million, against profits of £158.8million in the same period last year.
But chief executive Steve Rowe said the company’s performance had been ‘much more robust than at first seemed possible.’
In August M&S announced it was set to cut 7,000 jobs over three months.
Sales for the six-month period across the group slid by 15.8 per cent to £4.09billion, with clothing and home sales taking the biggest hit.