Yahoo Finance John Lewis warns over job cuts as staff miss out on bonus
The John Lewis Partnership has cautioned over potential job cuts as it told staff it will not hand out a bonus for only the second time since 1953 after a hefty loss.
Bosses at the retail giant said employees are likely to be affected by plans to cut costs more aggressively to help complete a turnaround of the group’s financial performance.
Chairwoman Dame Sharon White told staff in a letter: “As we need to become more efficient and productive, that will have an impact on our number of Partners.
“That’s a massive regret to me personally.”
Dame Sharon said there are currently “no numbers” on how many staff could be impacted but added that planned improvements will leave the company with a smaller workforce.
She told reporters: “As we get more efficient, that inevitably means less time and fewer partners.
“We are trying to make clear this morning that the partnership planning is uprating the amount of efficiencies we can go after. We are expecting them to have impacts but there are no numbers.”
It came as the group, which runs the department store chain and the Waitrose supermarket arm, recorded a £78 million loss before exceptional items for the year to January 28.
It represented a slump from a £181 million profit in the previous year, with John Lewis blaming “inflationary pressures”.
JLP recorded a £234 million pre-tax loss once additional costs such as significant writedowns on retail properties were taken into account.
Dame Sharon also apologised to staff for the lack of a bonus payment after a “tough set of results”.
Her letter said: “You’ve been exceptional in what has been another very tough year. Two years of pandemic and now a cost-of-living crisis.
“Inflation has had a big impact on the partnership and sent our costs soaring – up almost £180 million on last year.
“I am sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay.”
On Thursday, the retail group said it fell to the loss after customers bought less, with sales declining by 2% to £12.25 billion for the year.
Waitrose sales declined by 3% to £7.3 billion, while John Lewis recorded 0.2% growth to £4.94 billion.
The partnership said on Thursday that it plans to triple its cost savings target from £300 million to around £900 million by January 2026.
It said the increased savings are likely to include an extra £236 million from further “simplification”.
Previous simplification efforts included changes to its head office, which resulted in 1,500 jobs being cut by 2021.
JLP said it has come under significant pressure from rocketing inflation over the past year, reporting £179 million in extra operating costs as a result during the year.
The update came a day after the group appointed turnaround specialist Nish Kankiwala as its first chief executive, in a shake-up of the leadership structure.
