Marks & Spencer reportedly cutting 500 jobs at headquarters

British high street favourite Marks & Spencer would be allegedly cutting 500 jobs at its headquarters in London as soon as this week.

According to Sky News, these cuts represent around 15 percent of the head office workforce and around half of those affected by the move will be contractors; stores will not be affected. It is believed a consultation period will begin on Thursday, reported the news channel over the weekend.

It is worth remembering that Marks & Spencer has just finalised a pay consultation, aimed at reducing its ever growing operational costs. The retailer’s CEO, Steve Rowe, is trying to halt a slump in sales, local media highlighted on Saturday.

Quoting sources, Sky said the cuts are likely to be announced next Thursday. In this regard, an spokeswoman for the company declined to comment on the report but added: "We said in May that organisation was an area of the business that needed further consideration and that we would update on this in the autumn."

M&S said to axe 15 percent of staff at headquarters to revert increasing costs

The news broke just as Marks & Spencer concluded a new pay deal with staff, which it said would make them “amongst the highest paid in UK retail” and with better benefits.

Last week, the firm was slammed for “unacceptable” performance of its clothing and home arm after sales dropped by 8.9 percent. Following this, Steve Rowe had said that they would be changing the pay and pension scheme, cutting premium pay for Sundays. After a heated protest taken to the streets by the company’s staff, on Friday, M&S had said it was offering a multi-year pay guarantee that would make its staff “amongst the highest paid in UK retail” along with “one of the best benefits packages”.

Steve Rowe replaced Marc Bolland as chief executive earlier this year with analysts predicting he’ll look to shrink Marks and Spencer’s stores network as online rivals continue to hit the retailer’s clothing business.

In this vein, ‘The Sunday Telegraph’ also reported last week Rowe was planning to cut parts of Marks and Spencer’s international business, including a prominent store of the Champs-Elysées in Paris.

Struggles to keep buyers coming to the store, unseasonal weather and promotional wars with direct competitors are costing Marks & Spencer. However, the retailer’s first executive remains positive, saying that there were “encouraging early signs” that the long-anticipated fashion turnaround was on its way.

Image:Marks & Spencer Web