WH Smith to slash management ranks by half: More 'hands on the sales floor' objective as job tiers go in cost-cutting shake-up

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The Independent Online
WH SMITH, Britain's largest stationer, is to cut half the management jobs from its high street shops in a bid to improve its customer service.

The group is cutting out two of its four layers of store managers, which means that 950 of the 1,800 jobs at these levels will go. The new structure will have just a store manager and a customer service manager, eliminating the posts of deputy, assistant and senior departmental manager.

WH Smith's job cuts underline the fact that many more companies are focusing cost-cutting measures on management, rather than shop- floor workers. That was confirmed yesterday by United Biscuits, which said that 500 management jobs - mainly in Britain - will be lost as part of a restructuring of its operations. BT is also targeting managers in its programme to cut 15,000 jobs by next March.

WH Smith is to add 600 jobs with the creation of a new tier of posts, just below manager level, called customer support leaders. A further 400 part-time sales assistants are also to be recruited.

WH Smith said it hoped that most of the redundancies would be voluntary and said it aimed to redeploy or relocate many of the managers affected. A spokesman added that they would be asked to transfer to the new layer of customer support leaders, with the same pay and conditions as in their previous post. But he added that he expected some of the managers would reject the loss of status.

'We are trying to respond to customer feedback,' the spokesman said. 'They made it clear that the biggest single weakness was that there are not enough hands on the sales floor when the customer needs them.' He added that the structure of store management had not been changed for 10 years. 'A lot has happened in those 10 years, including the introduction of new technology.'

Among the technology improvements has been the introduction of electronic till scanning systems, which automatically update stock records as sales are made, making re-ordering easier and less labour- intensive.

The redundancies also reflect the tougher environment facing retailers following the consumer book of the 1980s. Although the economy is slowly recovering from the slump, high street sales are still sluggish and few retailers expect a dramatic increase over the next few years.

That has forced retailers to compete fiercely for business, with many cutting their prices rather than increasing them. And all are looking for ways to cut costs to compensate.

The pressure has so far been most acute among food retailers, where depressed consumer spending has been exacerbated by the rapid expansion in the number of food stores opened in recent years. Last week, J Sainsbury announced it was cutting 650 jobs, Tesco is shedding 800 and Argyll - owner of Safeway - is expected to follow suit.

Retailers are also reluctant to cut jobs in stores as they need to improve service levels to attract shoppers. WH Smith's 400 part-time assistants will be additional staff, rather than replacing full-time workers.

WH Smith's redundancy package will cost up to pounds 6m, depending on the number of managers who accept alternative posts. But it will save pounds 2.4m a year, most of which will be evident in the group's results for the year to May 1995. Smith's shares closed up 3p at 521p.

UB restructuring, page 32

View from City Road, page 32

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