Marks & Spencer spark job cut fears as they slash redundancy terms
August 20, 2008
Marks & Spencer have announced plans to slash redundancy pay0outs by up to 25% for 70,000 of its UK staff.
The retail giant is currently in talks with representatives over the plans, which would cut maximum payouts from 70 weeks to 52 weeks depending on how long the employee had been at M&S.
Marks & Spencer want to implement the changes by the beginning of September, three months after they announced a shock profit warning.
An M& S spokeswoman said the company had not looked at redundancy benefits since 2006 and the new terms will still be generous than most competitors.
However the move has triggered fears of job cuts at M&S. The company’s profit warning has shown they are feeling the squeeze of the credit crisis.
An internal memo, seen by the Times newspaper, claimed a typical 49 year old employee with 30 years of service would see their possible pay off fall from £35,000 to £26,000. Those employee’s over 41 would get three weeks pay per year worked, instead of the current 3.75 while staff aged between 22 and 40 would receive two weeks instead of 2.5 weeks.
The union GMB criticised the cuts contrasting them with the £500,000 handed to former director at M&S, Steven Esom, who left the firm in July after shoppers turned their backs on higher end goods.
The GMB’s general secretary, Paul Kenny said “We are fearful that job cuts are on the way at M&S. Why else would they cut their existing policy if they did not intend to use it? Why do people at the bottom get the sack on the cheap while the top bosses get large payouts even when they leave having messed up?”
Executive chairman of M&S Sir Stuart Rose said consumer confidence had “deteriorated markedly” between April and June. Marks & Spencer cut staff bonuses to £16.8 million from £91 million the year before even though they posted profits of over £1bn for the first time in 10 years.
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