Dismay at M&S over job cuts

MORALE AT Marks & Spencer has hit rock bottom on the eve of a major promotional campaign to revive the retailer's ailing fortunes.

Insiders said that the 3,800 employees at M&S's headquarters in Baker Street, London, were dismayed at the recent decision by the new chief executive, Peter Salsbury, to cut 200 jobs in a bid to reduce costs and improve efficiency. These will be the company's first redundancies since 1992.

Staff were further unnerved by the company's refusal to decide who will be made redundant until the end of a consultation process that could last months. According to Baker Street insiders, M&S's decision to identify the departments where the cuts will take place without naming the people who are to lose their jobs will lead to months of damaging uncertainty for thousands of employees.

The company, which was rocked by a shock profits warning in January, has told the workforce that the units responsible for buying, store development and estates will bear the brunt of the job cuts. Other departments, such as personnel, finance and information technology, are still to be examined by Mr Salsbury and could see a number of redundancies in June when the chief executive's wide-ranging review is due to be completed.

A company spokeswoman said the delay in finalising the redundancies - set to cost pounds 8m - would allow M&S to consult widely with the workforce.

The slump in staff morale comes as M&S prepares to launch a major promotional campaign to win back consumer confidence and reverse its recent decline in sales. Displays will draw customers' attention to M&S-specific products such as non-polish shoes, non-iron shirts and new food ranges. The company said it was not planning to slash prices but admitted the campaign would focus on "value for money".

"It's a change of direction," said a spokeswoman for the traditionally conservative company. "We want to illustrate products which set us aside in terms of quality, value and innovation," she added.

The programme includes plans to double the promotion and advertising budget to pounds 20m for the year. In a leaked memo sent to staff last month, Mr Salsbury wrote: "We have to restore quickly our customers' confidence in [M&S] as their preferred retailer", with staff providing "visibly better service".