It is tempting, but almost certainly missing the point, to describe the 1,200 redundancies announced by Marks and Spencer yesterday as another example of the economy going to hell in a handcart.
While the store’s decision is a tragedy for all of the people who stand to lose their jobs – and taken it should be noted just four months after M&S watered down its redundancy terms – the scale of cutbacks remains relatively minor when compared to some of the mayhem breaking out on the high street.
In fact, the job losses amount to just under two per cent of the company’s total workforce, while only 27 stores across the UK are deemed so unprofitable that they must be closed. It is possible that most, if not all, of the redundancies could be found voluntarily.
This is not, in other words, a repetition of the absolute disaster that has put paid to household names such as Woolworth’s and Adams.
In less frenetic times, M&S’s tactics would have been described as long overdue restructuring in an attempt to better address challenging trading conditions.
What the company actually appears to be doing, no doubt using the recession as a timely excuse, is to make some controversial cost-cutting changes that directors would almost certainly have shied away from pursuing in happier times.
As well as reducing, slightly, its workforce, M&S has decided to cut costs by making changes to one of the most generous pension schemes outside of the public sector.
Quite how the company has afforded for so long to run a non-contributory final salary scheme is a mystery, although since the cost of doing so is about £300million a year it is clear that patrician arrangements on such a scale were always going to have to come to an end sooner or later.
