British retailer Marks & Spencer plans to eliminate about 7,000 jobs as it streamlines management and store operations after sales plunged during the coronavirus pandemic.
The job cuts, which represent about 9 percent of the company’s workforce, will occur over the next three months and affect Marks & Spencer’s central office, regional management and U.K. stores, the London-based grocery, clothing and housewares chain said Tuesday.
Sophie Lund-Yates, an analyst at financial services firm Hargreaves Lansdown, said the cuts stemmed from Marks & Spencer’s understanding that drastic measures were needed to survive.
“M&S has realized it needs to act now if it wants to secure the longevity of the business,″ she said. “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.”
“There remains substantial uncertainty about market conditions and the duration of social-distancing measures, and we are retaining a cautious approach to planning for the balance of the year,″ Marks & Spencer said in a statement.
Group revenue fell by 13.2 percent in the quarter ended Augsut 8, driven by a 38 percent drop in in-store sales of clothing and housewares, the company said. Some 68 percent of Marks & Spencer’s orders were delivered to customers’ homes during the quarter, compared with 29 percent during the same period last year.
The company acknowledged that there is a new normal in the offing.
“These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs,″ Chief Executive Steve Rowe said.-AP
Chief Executive Steve Rowe says M&S needs to be leaner.
