More than 6,000 retail jobs were cut from the UK high street on Wednesday as the full impact of the pandemic on the high street – combined with the wind-down of the government furlough scheme – starts to emerge.
The latest job losses – from retailers ranging from Harrods to Philip Green’s Arcadia group and SSP, the company behind hundreds of railway and airport eateries – bring the total cuts announced this week to more than 10,000.
New data showed the number of shops that have collapsed into administration in the first six months of 2020 is already more than the number that failed in the whole of 2019.
On Wednesday John Lewis confirmed it would not reopen some of its department stores that closed because of the lockdown. In a letter to staff, the group’s chairman, Sharon White, said it would close a number of stores and one London office, and was unlikely to pay its annual staff bonus next year. The annual payout – which is the same percentage for everyone from the chairman to Saturday shelf stackers – is regarded as a key part of the employee-owned group’s culture.
The shops likely to close were not named but industry insiders said those being considered for closure included Watford, Newcastle and Newbury. John Lewis said details would be shared with staff by the middle of July.
According to the data collected by the Centre for Retail Research, 2,123 stores operated by 38 large- and medium-sized retailers fell into administration in the first six months of this year. They employed 49,200 staff.
Some 2,051 stores operated by 43 such retailers, with 45,500 employees, went into administration in the whole of 2019.
While not all the jobs will disappear, because parts of many businesses are rescued by a new owner, the figures indicate the seriousness of the blow to high streets from weeks of enforced store closures to curb the spread of the coronavirus.
On Wednesday SSP, the owner of Upper Crust and Caffè Ritazza, said it would axe 5,000 jobs – almost half its 9,000 UK workforce, after suffering heavy losses during the lockdown. The company, which operates around the world, said its cuts were in the UK because the economy and travel industry had been slower to bounce back from the pandemic.
“The reality is that passenger numbers still remain at very low levels,” SSP said. UK rail passenger numbers are 85% lower year on year, while UK air travel has been largely non-existent, it added.
Harrods told its staff that one in seven of its 4,800 employees would be affected by job cuts arising from the “ongoing impacts” of the pandemic.
In a note to Harrods staff, the chief executive, Michael Ward, blamed the cuts on social distancing and a lack of tourists. “The necessary social distancing requirements to protect employees and customers is having a huge impact on our ability to trade, while the devastation in international travel has meant we have lost key customers coming to our store and frontline operations,” he said.
Jobs in parts of the store that remain closed, including beauty services and cafes, are expected to be among those to go.
Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said 500 head office jobs out of 2,500 would go in the coming weeks.
Further job losses, particularly in retail and hospitality, are expected as the government winds down its furlough scheme.
From the beginning of next month employers must start to contribute towards the cost of the furlough scheme, which has supported more than 9 million workers with 80% of their salaries, up to £2,500 per month, through the lockdown.
In the first month employers will have to pay only pension contributions and national insurance, but by October they will also have to pay 20% of staff wages.
On Tuesday the prime minister, Boris Johnson, acknowledged that many jobs that existed before the pandemic would soon disappear and that his government planned to “deliver jobs, jobs, jobs”.
The Bank of England has warned the UK is at risk of returning to the high unemployment levels of the 1980s and the chancellor, Rishi Sunak, is expected to set out substantial jobs creation plans in his summer statement next week to help offset the growing wave of redundancies.
The collapse of shirt maker TM Lewin and the Harveys furniture chain on Tuesday has added another 800 job losses and put a further 1,300 at risk.
Other retailers to have failed in recent weeks include the department store Debenhams and the fashion retailers Cath Kidston, Laura Ashley, Go Outdoors, Monsoon, Oasis and Warehouse.
There are also widespread store closures planned by high street names including Marks & Spencer, Next, New Look and the owner of jeweller H Samuel.
On Thursday, creditors to Poundstretcher will vote on a rescue deal under which more than 250 outlets could close affecting more than 2,000 jobs if landlords do not agree to swingeing rent cuts.
Many retail firms were already weak at the dawn of 2020, as rising costs combined with low consumer confidence and a switch to online shopping, which has required expensive investment in home delivery networks. But weeks of enforced closure during the pandemic have been the nail in the coffin for many brands.
The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.
While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.
Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.
Rolls-Royce - 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.
BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.
Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.
Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.
Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.
British Airways - 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.
EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.
Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.
Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.
P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.
JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.
Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.
Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.
Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.
The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.
Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.
Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy
Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.
Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.
Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.
Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.
Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.
Swissport – 4,500 jobs
Swissport, which handles services such as passenger baggage and cargo for airlines has began a consultation process that is expected to result in 4,556 workers being made redundant, more than half of its 8,500 UK workforce.
Royal Mail - 2,000 jobs
Royal Mail has announced a cost-cutting plan that will involve slashing about 2,000 jobs. One in five of its near-10,000 management roles will go by March 2021, in areas including IT, finance, marketing and sales. The company’s 90,000 postal workers would not be affected by the cuts.
SSP Group – 5,000 jobs
The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, which represents about half of its workforce. The cuts will have an impact on staff at its head office and across its UK operations. It follows a dramatic fall in domestic and international travel, which has hit the company’s sites based at railway stations and airports.
Accenture – 900 jobs
The consultancy firm is reduces costs in the face of lower demand for its services. The New York-listed company employs 11,000 people in offices across the UK including in Aberdeen, London and Cambridge. The UK job cuts will be at all levels, including managing directors, and across all parts of the business.
Harrods – 700 jobs
The department store group is cutting one in seven of its 4,800 employees due to the “ongoing impacts” of the pandemic. The Harrods chief executive, Michael Ward, blamed the cuts on social distancing and a lack of tourists.
Airbus – 1,700 jobs
The European planemaker announced plans this week to cut 1,700 jobs in the UK as it warned the coronavirus pandemic had triggered the “gravest crisis” in its history.
White had warned previously the group might not reopen all of its stores. She confirmed the plans in the letter to staff, first reported by the Evening Standard.
The group, which also owns the Waitrose chain, has reopened 22 of its 50 department stores since non-essential retailers were given the green light to restart trading on 15 June. Plans to open a further 10 were announced on Wednesday, including in Oxford Street in London on 16 July.
In the letter, White said: “The difficult reality is that we have too much store space for the way people want to shop now. As difficult as it is, we now know that it is highly unlikely that we will reopen all our John Lewis stores. Regrettably, it is likely that there will implications for some jobs.”