Yahoo Finance Hermes to recruit thousands as Marks & Spencer slashes 950 jobs
High street stalwart Marks & Spencer is slashing hundreds of jobs to survive the Covid crisis, amid a hiring spree by package delivery firm Hermes as it scrambles to take advantage of a surge in online shopping.
M&S bosses are poised to axe 950 roles in a battle save money, with spooked customers shunning bricks and mortar stores in favour of goods bought over the internet.
The firm sells just a fifth of its wares online and analysts fear it could be forced into even steeper cutbacks in coming months.
In sharp contrast to the woes of bricks and mortar players, Hermes is seeking to fill 1,500 new full-time roles in its delivery network and head office, as well as hiring a further 9,000 freelance drivers.
The firm - which has been trading for two decades and has more than 15,000 self-employed drivers in the UK - is investing £100m in its expansion and has already opened 90 new sub-depots this year.
Chief executive Martijn de Lange said the pandemic has lit a rocket under already phenomenal growth of online shopping and his firm sees no sign of this changing.
The M&S cuts are the latest blow to the British High street after a wave of retailers including John Lewis and Boots announced shop closures and 1,300 and 4,000 job losses respectively.
M&S will remove roles that are similar to each other to have a more flexible management structure. The cuts will affect employees in property and back-end operations as well as store managers.
The company vowed to be "never the same again" at the peak of the outbreak, saying it would examine central support costs and headcount at all levels. Later redundancies are likely to follow in other parts of the business.
In May it revealed a £1bn plan of action to help it survive the crisis. The company pressed ahead with new measures to revive its fortunes, planning to save around £500m this financial year alone.
The job cuts are consistent with M&S’s ambition to dramatically restructure in response to coronavirus, analysts at Redburn said.
The question will be how much cash the cuts save, they said, with staff expenses a consistent thorn in M&S's side.
Sacha Berendji, director of retail, operations and property at M&S, said: "Through the crisis we have seen how we can work faster by empowering store teams and it’s essential that we embed that way of working."
M&S has now started consultation with its staff and will offer voluntary redundancy to staff affected.
Separately, the US owner of Asda has restarted talks with prospective suitors over the sale of a stake in the grocer. It paused the process when coronavirus hit. Walmart could still choose to go ahead with a stock market listing.
M&S furloughed about 27,000 of its 78,000 employees and cut its prized dividend as it attempts to preserve cash. It previously announced plans to close as many as 120 stores. Even so, it still has about 900 sites.
Although the company's food shops were allowed to stay open, trade suffered, especially those branches in city centres and train stations where footfall dried up overnight.
It has mounted a string of failed reinventions over the past two decades, each meant to offset the decline of its clothing business and modernise its food arm.
M&S is the latest retailer to join other brands including Sir Philip Green's Topshop and shirt seller TM Lewin to slash jobs, with thousands of retail roles at risk.
The pandemic has piled further pressure on an industry already battling high rents, business rates, tight margins and a rapid shift online before it struck.
Andy Barr, co-founder of online price-tracking website Alertr, said: “Online shopping was making waves long before Coronavirus, but lockdown has only further boosted this. By making these kinds of cuts now, hopefully retailers will be better off.”
M&S shares closed 0.2pc lower, valuing the company at £1.9bn. The stock has more than halved this year.
Consumers are still cautious about visiting stores, with footfall 40pc lower than last year according to research firm Springboard. London is the worst hit, with visits down 71pc as tourists and office workers shun the capital.
Diane Wehrle, insights director at Springboard, said more people are now visiting high streets week on week but the increase in footfall had halved to a 4.5pc rise compared with the week before.
She said: “Last week demonstrated that the longed-for flood of shoppers returning to bricks and mortar destinations and retail stores once again became a trickle."
