Swann to cut 300 jobs in head office cull at ailing WH Smith
Sunday 18 April 2004
WH Smith will announce a radical shake-up of its operations on Thursday that will see a quarter of head-office staff being made redundant.
The 300 job cuts will come from the retailer's Swindon offices in an attempt to strip costs out of the ailing business.
Kate Swann, WH Smith's new chief executive, wrote to employees last week warning of the cuts. Staff will learn next week whether they have managed to cling on to their jobs.
The announcements will be made at WH Smith's interim results presentation, which follows disastrous Christmas trading.
In a further attempt to contain costs, Ms Swan is understood to be planning to cut WH Smith's dividend to 9.5p-a-share for the full year, some 3p off analysts' forecasts.
WH Smith refused to comment. But Ms Swann is expected to announce a renewed focus on the company's UK's operations, which are blamed for its recent lacklustre performance. WH Smith has already sold off most of its American stores and the company will announce this week that its Asia Pacific business will be next on to the blocks. Analysts believe that the Asia Pacific stores could fetch £30m to £40m.
Ms Swann is now under pressure to detail how she intends to revitalise the company's UK stories. Analysts point out that WH Smith has joined the likes of Boots and Woolworths as a historic name on the high street which has a lost its unique selling point.
One source close to the company said that WH Smith had become "flat footed" because it takes too long to make important decisions. "There is a huge disconnect between the head office and the stores. The sort of changes that Swann is making now should have been done five years ago," he said.
Another source said that one of Ms Swann's main tasks was to rebuild staff morale. Yet "WHS CVs are flying all over the place."
The company's recent decision to impose new penalties on staff with final salary pension schemes but who wish to retire before 65 is understood to have gone down particularly badly.
The City will, however, be disappointed to learn this week that WH Smith has yet to find a replacement for its chairman, Richard Handover.
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