The John Lewis Partnership has announced that it plans to cut up to 1500 head office staff by April 2021, as part of the next phase of its five-year strategy to return to sustainable profits by 2025.
Last month, the business published the Partnership Plan (see related), which outlined proposed changes to adapt to changing shopping habits and get closer to customers, while expanding in new areas outside of retail.
The first two years of the plan focus on strengthening the Waitrose and John Lewis retail businesses, backed by £1b investments in customer service and experience in store and online – a move which, it says, will require the business to become a leaner, simpler and faster. Its plan set out a target to make £300m in annual savings by 2022 through operational efficiencies throughout the business.
"A key part of our efficiency plan is to create an agile and flexible head office that is even closer to customers and frontline partners," reads a statement from the partnership. "We have shown through the pandemic how well we can work at pace, and we want this to continue. This next phase of efficiency improvements builds on changes begun in October 2019.
"We propose to reduce the size of our head office operations by up to 1500 roles between now and April 2021. We will do this by simplifying how we work and de-layering our structures. The changes will save another £50m on top of £50m of recent efficiencies, a significant contribution to our £300m target."
The business acknowledged that it was a "difficult decision" to make, and that it would seek to find new roles for those affected within the partnership where possible, and redundancy support and retraining funds if not.
The partnership also announced that Patrick Lewis, executive director, finance, has decided to leave the partnership at the end of the year following a 26-year career there. Patrick will be succeeded by Bérangère Michel, currently executive director, customer service (and former finance director for John Lewis). Bérangère joined the partnership in 2008 and the executive team in February 2020, and has 20 years of leadership experience in finance.
As part of the changes to head office, the size of the executive team will also reduce, as the business will not recruit a new executive director for customer service. Instead, those responsibilities will transfer to James Bailey, executive director for Waitrose, and Pippa Wicks, executive director for John Lewis.
Sharon White, chairman of the John Lewis Partnership, says: “Our partnership plan sets a course to create a thriving and sustainable business for the future. To achieve this we must be agile and able to adapt quickly to the changing needs of our customers.”
“Losing partners is incredibly hard as an employee-owned business. Wherever possible, we will seek to find new roles in the partnership and we’ll provide the best support and retraining opportunities for partners who leave us.
“It has been a privilege and pleasure to work with Patrick. He is the best of the partnership and personifies our purpose and our values. His determined drive to build the financial strength of the business has granted us opportunity to emerge stronger from the Covid crisis. Patrick told me a while ago of his wish to leave the partnership to seek new opportunities. I’m very grateful to him for agreeing to stay until we’d been able to identify a successor.
“I am delighted that Bérangère has agreed to succeed Patrick as executive director for finance. Bérangère brings 20 years of leadership experience in finance, including three years as finance director for John Lewis. She is passionate about the partnership, and what it means to be a partner, and will do a brilliant job.”
Patrick Lewis, executive director of Finance, says: “I’ve felt very lucky to be part of a leadership team in such an extraordinary organisation. I’m immensely proud of the role the partnership plays in demonstrating a better way of doing business, and hugely grateful for the unstinting support I’ve had from colleagues over such a long period in furthering that goal. I’m delighted that Bérangère will be stepping into the role, bringing with her both a deep understanding and commitment to the partnership, and valuable financial experience.”
Bérangère adds: “The whole partnership will miss Patrick, who has done a fantastic job in putting our business on strong financial footing. I look forward to continuing this work to ensure the partnership plan is a success.”