John Lewis – Never Knowingly Overstaffed (Until Now)

Posted on Jan 29, 2024. by NTI

John Lewis is planning to cut up to 11,000 jobs as part of its plans to turnaround the business.  The proposed redundancies at the John Lewis Partnership, which also includes Waitrose, represents a reduction of just under 15% of its 76,000 strong workforce.

The cuts are expected to be made over the next five years via a combination of redundancies and staff who leave voluntarily not being replaced.  The Guardian reported “sources” expect the losses to be centred on the London head office and John Lewis more heavily.  The last two years have already seen closure of several stores including in Peterborough, York and Tunbridge Wells.

The last two years at John Lewis have also seen the shelving of its “never knowingly undersold” price match pledge.  The policy, introduced in 1925, only applied to purchases made in store, and was not compatible with the modern world.

The timing of the job cut news at John Lewis is likely to rankle with partners (as they are called at John Lewis as all employees co-own the Partnership via a trust) recently announced that redundancy pay would be halved from the beginning of February.  Staff that lose their jobs will qualify for the standard one week of pay per year of service, down from the previous two weeks.

In more bad news for the UK High Street, Sky News announced over the weekend that Superdry is drawing up plans for potential store closures and job cuts.  This plan followed news last week of sales dropping by nearly a quarter in the six months to October, which can never be good news. The results (which were delayed – another sign of bad news) were accompanied by the appointment of a new finance boss, the fifth in five years (another bad sign!)

Superdry, which has approximately 3,300 staff across over 215 stores, said today (Monday 29 January) it had hired “advisers to explore the feasibility of various material cost saving options.”  The Sky News announcement over the weekend reports the advisers as PwC and we can tell you the options are likely to include a Company Voluntary Arrangement or a Restructuring Plan.

The Superdry statement continued: “While there is no certainty that any of these options are progressed, [we] aim to build on the success of the cost saving initiatives carried out by the company to date and position the business for long-term success.”

Long term success you say?  We don’t need to tell you that a share price today of 17p versus £19 in 2017 means success may be a little way down the road.

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