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Marks & Spencer axes 7,000 workers despite surge in online sales

Wed 26/08/2020 by Richard Wilkinson
Marks & Spencer extends network of in-store farms, credit. Thomas Samson, AFP

UK retailer Marks & Spencer is to cut 7,000 jobs over the next three months due to the shift in trade caused by the coronavirus pandemic. Although online and home deliveries were strong, in-store sales of clothing and home goods were “well below” 2019 levels. M&S said it hoped a “significant proportion” of the cuts – about a tenth of its workforce – will be voluntary redundancy and early retirement. In a statement, M&S said it was

“too early to predict with precision where a new post-Covid sales mix will settle. We must now act to reflect this change”.

The retailer said that the pandemic had showed it could work more flexibly and productively, with more staff multi-tasking and moving between food, clothing and home departments.

During the lockdown, M&S boss Steve Rowe said that customers might “never shop the same way again” after the coronavirus crisis. M&S said total sales in its clothing and home arm dropped 29.9% in the eight weeks since shops reopened, with store sales plummeting by 47.9% and online surging 39.2%.

M&S employs almost 78,000 people, mostly in the UK. The bulk of the latest job cuts are expected to come among shop floor workers, with about 12% of customer assistant roles going. The company is shifting resources and recruiting towards areas that are expanding such as online and food. In the last 13 weeks, M&S’s total food sales increased by 2.5%.

According to latest Kantar data, the grocery market expanded by 14.4% in the 12 weeks to 9 August. Sales at Morrisons increased the most, rising by 16% over that period.

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