M&S To Axe 525 Jobs At Head Office As Chief Battles Sales Slide

Marks & Spencer (Frankfurt: 534418 - news) has announced it will axe 525 jobs at its head office as its new chief executive attempts to halt a protracted slump in sales which has left the company facing renewed questions about its strategy.

The cuts, which were first reported by Sky News at the weekend , will see 260 permanent employees lose their jobs with 200 contractor positions also set to go.

A further 400 roles in the firm's IT and Logistics departments will be moved out of London.

M&S store workers will not be affected.

Announcing the job losses, M&S CEO Steve Rowe, said: "It is never easy to propose changes that impact on our people, but I believe that the proposals outlined today are absolutely necessary and will help us build a different type of M&S - one that can take bolder, pacier decisions, be more profitable and ultimately better serve our customers."

The announcement may threaten to further strain relations with employees after a public row over pay and conditions.

The high street chain said on Friday that it had completed a consultation and was offering a multi-year pay guarantee that would make staff "amongst the highest paid in UK retail and (the recipients of) one of the best benefits packages".

But critics continued to say the offer could cost some long-serving shop staff thousands of pounds because M&S is scrapping premiums for working on Sundays and at anti-social hours.

Mr Rowe, who replaced Marc Bolland as M&S's chief executive earlier this year, is facing pressure to demonstrate to shareholders that he can transform the fortunes of the UK's best-known retailing brand.

The new boss, who joined the company as a Saturday boy in its Croydon store in the 1980s, is expected to provide a comprehensive blueprint for improving M&S's fortunes in November.

Analysts expect him to shrink its store estate as intense competition from online rivals continues to hit M&S's market share in its clothing business.

Shares (Berlin: DI6.BE - news) in M&S have fallen nearly a third in the last year.