(qlmbusinessnews.com via news.sky.com– Thur, 9th July 2020) London, Uk – –
The cuts are the latest to hit the retail sector and come a day after Rishi Sunak announced a “plan for jobs” to spur recovery.
High street chain Boots and department store chain John Lewis are cutting a total of more than 5,000 jobs – blamed on the impact of COVID-19.
Boots plans to axe 4,000 workers in a major shake-up while John Lewis said that eight of its shops were set to remain closed after the lockdown, putting 1,300 workers at risk.
The Boots restructuring will affect around 7% of the its workforce, in particular at its Nottingham support office.
Store deputy and assistant manager and customer adviser roles across the country are also facing the axe, while 48 Boots Opticians sites will close.
The John Lewis closures, which include two full-size department stores in Birmingham and Watford plus six smaller shops, were blamed on the impact of the pandemic in accelerating the shift from in-store shopping to online.
Boots pointed to a similar trend.
The cuts add to thousands already announced this week – with logistics firm DHL cutting 2,200 roles at Jaguar Land Rover sites, newspaper publisher Reach axing 550 workers and Pret A Manger closing 30 shops, putting at least 1,000 jobs at risk.
Meanwhile, the UK boss of Burger King warned in a BBC interview that as many as 10% of its 530 stores may not be able to survive – threatening up to 1,600 jobs.
The announcements from Boots and John Lewis come a day after a “plan for jobs” announced by Rishi Sunak which offered measures including a VAT cut for the hospitality and tourism sector.
It was criticised by the retail industry which was not given similar help.
Boots stores were among “essential” retailers allowed to stay open during the lockdown but still saw sales fall 48% over the last three months.
The business, owned by US-listed Walgreens Boots Alliance, said that the cuts represented an “acceleration” of its transformation plans to improve profitability across the business.
Sebastian James, managing director of Boots UK, said: “The proposals announced today are decisive actions to accelerate our transformation plan, allow Boots to continue its vital role as part of the UK health system, and ensure profitable long-term growth.
“I am so very grateful to all our colleagues for their dedication during the last few challenging months.
“They have stepped forward to support their communities, our customers and the NHS during this time, and I am extremely proud to be serving alongside them.”
“In doing this, we are building a stronger and more modern Boots for our customers, patients and colleagues.
“We recognise that today's proposals will be very difficult for the remarkable people who make up the heart of our business, and we will do everything in our power to provide the fullest support during this time.”
Walgreens said in a quarterly update to investors that the impact of COVID-19 on sales in the latest quarter was up to $750m (£584m), mainly reflecting its international division which includes Boots.
It said that footfall was down 85% in April, with customers advised to leave home only for food and medicine.
“While most Boots stores remained open throughout the UK lockdown to provide communities with pharmacy and essential healthcare, our largest premium beauty and fragrance counters were effectively closed,” Walgreens said.
It said the performance of the UK business, together with ongoing uncertainty related to the pandemic, would mean a write-down of $2bn (£1.6bn) on its value – sending the wider group to a $1.7bn (£1.3bn) loss for the third quarter.
Neil Saunders, managing director of GlobalData Retail, said: “Even before this crisis, Boots had issues.
“Many of its stores need investment, its proposition lacks clarity, and it faces growing competition from both specialist and generalist beauty players alike.
“The pandemic and its aftermath will simply exacerbate these problems and have a materially negative impact on the business – which is one of the reasons why Walgreens has been quick to write down the intrinsic value of the division.”
By John-Paul Ford Rojas