A John Lewis spokesperson explained its return to profit plan is working but it means reducing the number of employees or ‘partners’ it needs in its business.
The statement reads: “The John Lewis Partnership has a plan to return to profit, which involves investing heavily to enhance our customer offer, technology, stores and becoming more efficient. This is working and performance is improving, but as we have already announced, that sadly means reducing the number of Partners we need in our business.”
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Last week UK news publication The Telegraph claimed employee-owned John Lewis had told staff it would cut redundancy pay to one week’s pay per year of service, due to its current two-week policy being “higher than typical market practice and comes at a very high cost”.
The publication noted that John Lewis offers “partnership redundancy pay” on top of statutory redundancy pay which is set by the Government.
It also claimed to have seen an internal memo which read: “Against all of our competing priorities for investment, it’s fair to say that the high cost of redundancy pay has been one of the things that’s prevented us from moving as quickly as we’ve wanted to transform ourselves for the future, and has restricted our ability to invest more in pay.”
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Allegedly the retailer claimed most of its staff would never be affected by the changes, with redundancies a “last resort” and workers completing shorter periods of employment benefiting from higher redundancy payments under a separate policy shift.
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By GlobalDataThe John Lewis spokesperson told Just Style: “It would be inappropriate to discuss details and our partners [employees] will be the first to know about any changes.”
However, The Telegraph shared a statement explaining that it offers a “generous and attractive range of benefits that includes a redundancy package, which will continue to be above the market”.
It continued: “We’re making changes as a high proportion of our current benefits package is weighted towards partners after they have left, when we want to better reward those currently working for us. These changes will allow us to invest more in our partners still within the business.”
Two weeks ago the same publication claimed John Lewis had warned staff that they faced smaller pay rises in a “reset” of its salary policies to limit pay rises if John Lewis needed to divert the cash elsewhere.
