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Tuesday, March 30, 1999 Published at 06:22 GMT 07:22 UK


Business: The Company File

New M&S chief axes 200 staff

Sales have been slumping at Marks and Spencer

The new chief executive of struggling retailer Marks and Spencers has announced 200 job cuts at its London headquarters.

It is the latest phase of a radical restructung programme by Peter Salsbury aimed at getting the business back on track.

The redundancies will affect the company's product buying and store development operations and most of those hit will be managers.


[ image: New broom: Peter Salsbury]
New broom: Peter Salsbury
The move follows the announcement last month of plans to axe three board directors and 28 divisional managers.

Mr Salsbury said: "We are confident that this new structure will have a positive impact on communications and decision making through M&S.

"The changes being implemented are essential to run our business in a more efficient, flexible and responsive way."

Mr Salsbury is attempting to revive M&S after the company warned in January that this year's profits would be down by almost a half to around £650m ($1.05bn).


[ image: Prices have been slashed to try and boost business]
Prices have been slashed to try and boost business
Retail analysts expect between 500 and 1,000 jobs to go eventually at head office.

The next tranche of redundancies is expected to hit the areas of IT, personnel, finance and public relations, a spokeswoman said.

Currently the company employs 3,800 staff at its Baker Street head office. Marks & Spencer has earmarked around £8m to pay for the redundancy costs of the first 200 jobs.

The company said it had no plans to extend the job cutting to its shop floor, adding that Mr Salsbury was actually keen to step up recruitment in its stores.

Shop closures are also not on the agenda, the group added.

Battle to reclaim former glory

Mr Salsbury took the post of chief executive on February 1.

He was handed the position after chief executive and chairman Sir Richard Greenbury split his role following a damaging boardroom row last year.

Mr Salsbury's task has been to "think the unthinkable" in an attempt to bring Britain's best known store back to its former glory.

Projects thought to be under consideration include increasing the profiles of its clothes designers, allowing credit cards to be used in stores and even selling other companies' brands.

Its first heavy national television advertising campaign promoting its products is expected to be launched later this year.

It is estimated that Marks & Spencer's falling sales have caused more than 2,600 job losses in the textile and clothing industries.



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