Jobs slashed as John Lewis overhauls structure

John Lewis Partnership is to radically overhaul its structure, including shedding a number of senior management jobs, as it looks to cut costs and adapt to an increasingly tough retail environment.

The group has traditionally been run as two separate businesses, the John Lewis department stores and supermarket chain Waitrose. But the retailer will now manage the partnership as one business, and is abolishing both the boards and managing director roles of the two divisions.

Paula Nickolds, current head of the department stores, will take on the newly-created role of executive director, brand, while Waitrose boss Rob Collins is to leave after 26 years with the group.

The number of people who sit on the central partnership board will also be reduced, from 13 to around seven, consisting of the chairman; executive director, finance; three elected directors; and a minimum of two non-executive directors, including the deputy chairman.

Around 75 of the 225 senior management head office jobs will be lost. The retailer said the overhaul should achieve cost savings of around £100m.

Chairman Charlie Mayfield said: "The lesson of the last two years is that we need more innovation, faster decision making and bolder steps to align our operating model with our strategy."

Mayfield - who will be replaced by John Lewis’s first female chairman, current Ofcom head Sharon White, when he leaves next year - called the changes "necessary" though he conceded they would be "difficult" for some partners.

But he added: "We are confident as a board that when the programme is complete, the partnership will be better position to break out from the cycle of declining returns and that are affecting most established retailers. We will be a more modern and more unified business."

Last month John Lewis reported a loss of £25.9m for the six months to 27 July compared to a profit of £0.8m a year earlier, while gross sales eased 1.2% to £5.42bn. It blamed difficult trading conditions and subdued consumer confidence alongside a rise in employee costs and an IT overhaul.

The management and structural changes will take effect from 3 February 2020. Collins, who leaves in January, said he did not believe there was a suitable role for him in the new structure. But he added: "I have been closely involved in the planning of the Future Partnership programme and I’ve very confident the new structure is the right one for the future."