The Times is correct:, if this story in
Marks & Spencer plans to slash the redundancy benefits for its 60,000 staff by up to 25 per cent in a move that has infuriated employees and triggered fears of a middle management cull.Leaving aside that this is still a very generous deal, much better than you would get elsewhere from my experience, the message it sends and the timing stinks. At a time of economic employees are quite nervous and all this does is confirm their worst fears and is hardly likely to lead to happy staff and customers*.
In an internal memo seen by The Times, the high street retailer is proposing to reduce the maximum payout that employees can receive in relation to their length of service from 70 weeks to 52 weeks.
Anyone aged over 41 would receive only three weeks’ pay for each year they had worked at M&S if made redundant, compared with 3.75 weeks’ pay at present. M&S wants to introduce the new conditions by September 1.
So it looks like there is going to be large sacle redundencies, but how much will it really save? How many people fall in to this bracket:
Employee representatives have warned the M&S board that the proposed changes had caused “an unprecedented level of feedback, concern and anger”.
In a letter sent to management last week they added: “There is zero confidence that we will not be entering another round of redundancies, and a strong suspicion that this is one of the reasons behind the proposal.”
However, a typical employee aged 49 with 30 years of service would see their potential payoff fall by £9,000 to £26,000. Employees aged between 22 and 40 would receive two weeks for every year, down from 2.5 weeks.The total saving can't reall be a huge amount given the scale of M&S Operations so why alienate all their staff? They could have gone through a voluntary programme with little fuss, now the spotlight is well and truly on them. If I was a shareholder I would be seriously questioning the ability of the management team to see the business through the upcoming hard times.
Much has been said about the imexpeience of the curent crop of senior managers in industry as they have only ever managed in good times, when anyone can manage a business. Now they are being tested and this team has been found wanting.
Yes, I know it's easy to say this with hindsight, but a good management team should have looked at this scheme when times were good and they were paying out record bonuses to staff. But as someone points out in the comments:
When Sir Phillip Green bought Arcadia he quietly tore up the employment terms and reduced redundancy to one week per year!
*I am one of those customers, call me man at M&S