The retail giant is considering cutting thousands of jobs after slashing redundancy terms.
According to reports in The Guardian, the group’s latest turnaround plan could see the jobs cut over the next five years after group halved its redundancy pay.
Sources told the newspaper that at least 10% of the staff-owned business’s 76,000-strong workforce could go across the group’s head office, supermarkets and department stores.
The number of roles in the business, which includes supermarket Waitrose, is expected to be gradually reduced over several years via redundancies and not replacing staff who leave.
According to The Guardian, one “well-placed source” said John Lewis executives had discussed cutting as many as 11,000 roles, amid rising pay and other costs and poor sales.
The John Lewis Partnership (JLP), which is owned by its staff via a trust, wrote to workers last week telling them it was cutting the terms of its redundancy package in half. This means from 1 February workers being made redundant will be offered one week of pay per year of service instead of two.
The company’s “partnership redundancy pay” is paid on top of statutory redundancy pay which is set by the Government at one week a year of service for over 22s and 1.5 weeks for those over 41, capped at a maximum of just over £19,000.
The announcement was particular galling for some staff as a number of senior executives at the company have recently left on the more generous deal.
John Lewis told staff it was making the change as the current package was “higher than typical market practice and comes at a very high cost”. It said it needed to “free up cash” with a “more affordable” policy.
In an internal memo issued on Thursday, the John Lewis Partnership said: “Against all of our competing priorities for investment, it’s fair to say that the high cost of redundancy pay has been one of the things that’s prevented us from moving as quickly as we’ve wanted to transform ourselves for the future, and has restricted our ability to invest more in pay.”
It added that it was raising the minimum redundancy payment for those who did not qualify for the full partnership package from one week’s pay to four weeks to “better support those with shorter service who are affected by redundancy”.
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