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New CEO seeks halt in sales

M&S axes 525 jobs following pay deal

M&S labelMarks & Spencer has announced 525 job cuts as its new chief executive Steve Rowe responds to a slump in sales.

The jobs cull will focus on its London head office and represents about 15% of staff and contractors.

Mr Rowe replaced Marc Bolland as chief executive in April and has been tasked with reversing a slide in homeware and women’s clothing sales.

The cuts follow a pay deal announced yesterday which is expected to make shop staff among the best paid in the retail sector.

It was agreed with the Business Involvement Group, the chain’s employee representative body, and includes proposed changes to pensions. 

Commenting on the pay deal, Sacha Berendji, Marks & Spencer 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.

“From April 2017 our people will be amongst the highest paid in UK retail and receive one of the best benefits packages.

“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.” 

John Dorrington, chairman of the Business Involvement Group, said: “We are satisfied that we have concluded a period of robust collective consultation where all views from across M&S have been strongly represented. In our view the business has listened carefully to all views and suggestions and as a result has made a number of key changes to the original proposals.” 

Pay and premiums

The proposed pay increases and premium changes will go ahead. Customer Assistants will get a 14.7% rise to £8.50 an hour (£9.65 in Greater London) from April 2017 and there will also be pay rises for Section Co-ordinators and Section Managers. The Customer Assistant rate is above the National Living Wage (£7.20) and above the wage campaigned for by the Living Wage Foundation (£8.25 outside London and £9.40 in London).

Premium payments will be simplified and made consistent across UK retail employees, including removing premium payments for Sunday working and moving to one standard payment for Bank Holidays.

The company says the vast majority of staff will receive higher pay as a result of the changes to pay and premiums. However, a significantly improved additional offer means that all will either receive higher pay or have the opportunity to maintain their current pay level.

Pensions

Active members of the M&S Defined Benefit scheme no longer earning new benefits in that scheme from April 2017 will be offered the chance to join the company’s Defined Contribution plan. 

Impact

As stated in M&S’s annual results statement on the 25 May, these changes are not expected to significantly impact on underlying costs in this or the next year financial year. However, there will be a non-underlying charge in the current financial year in the range of c.£100m to £150m.

 



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