Burberry to cut 500 jobs worldwide in £55m cost-saving drive

Burberry’s season sunglasses, detailed with the luxury brand’s logo and Thomas Burberry Monogram; @Burberry


Powered by Guardian.co.ukThis article titled “Burberry to cut 500 jobs worldwide in £55m cost-saving drive” was written by Sarah Butler, for The Guardian on Wednesday 15th July 2020 08.07 UTC

Burberry is to cut 500 jobs worldwide, including 150 in its UK head offices, as part of plans to slash costs by £55m after a slump in sales during the coronavirus pandemic.

Retail sales dived by 48% in the three months to the end of June, including a 75% fall in Europe and the Middle East, as countries closed shops and offices and severely limited travel to control the spread of Covid-19. Sales in the UK were particularly hard hit, with tourists staying away and stores remaining closed for longer than in Europe and Asia.

In the UK, where Burberry employs 3,500 people, the company said it would keep its headquarters in both Leeds and central London but would be cutting head office roles across numerous departments. It said jobs in stores and manufacturing were safe.

Outside the UK, no stores will close but the company said it wanted to “improve retail efficiency” with fewer staff in stores and cut back office space, with a shift to working from home in some areas.

Julie Brown, the chief operating officer of Burberry, said the company was also keeping its portfolio of 13 stores in Hong Kong “under review” after sales were hit by pro-democracy protests, followed by coronavirus. The territory now accounts for less than 3% of Burberry’s sales, down from 8%.

Burberry said it wanted to reinvest the savings in marketing activities including pop-up stores, digital campaigns, events and improved store displays.

The £55m savings drive comes on top of £140m of cost cuts already announced.

Brown said the company would be closing some offices outside the UK as it realised that staff could work just as well from home. She said: “One of the good things that has come out of Covid is ways of working differently.”

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.

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

G4S – 1,150 jobs
13 July: The security company G4S plans to make 1,150 workers redundant as it scales back its struggling cash handling business and contends with pandemic-hit cash usage.

Boots  4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis  1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor  450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf’s Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

DHL  2,200 jobs
7 July: Some 2,200 UK logistics workers involved in making Jaguar Land Rover vehicles are set to lose their jobs. About 40% of DHL’s staff employed on the contract for the carmaker.

Reach  550 jobs
7 July: The owner of the Daily Mirror, Daily Express and Daily Star newspapers is to cut 550 jobs, 12% of its workforce, amid reduced demand for advertising in its titles.

Pret a Manger  1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group  1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia  500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group  5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Accenture  900 jobs
1 July: The New York-listed consultancy firm is making 900 job cuts at all levels across 11,000 UK employees in the face of lower demand for its services.

Harrods  700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees due to the “ongoing impacts” of the pandemic.

Airbus  1,700 jobs
30 June: The European planemaker announced plans to cut 15,000 jobs, including 1,700 in the UK, as it warned the coronavirus pandemic had triggered the “gravest crisis” in its history.

Harveys  240 jobs
30 June: Administrators made 240 redundancies at furniture chain Harveys with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin  600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently with the loss of about 600 jobs.

Royal Mail  2,000 jobs
25 June: Royal Mail has announced a cost-cutting plan that will involve slashing about 2,000 jobs, or one in five of its near-10,000 management roles.

Swissport  4,500 jobs
24 June: Swissport, which handles passenger baggage and cargo for airlines, has begun a consultation process to make 4,556 workers redundant, more than half of its 8,500 UK workforce.

Jaguar Land Rover  1,100 jobs
15 June: The UK’s largest car producer has cut 1,100 contract workers at manufacturing plants in Merseyside and the West Midlands.

Travis Perkins  2,500 jobs
15 June: The builders’ merchant, which is behind DIY retailer Wickes and Toolstation, is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce.

Centrica  5,000 jobs
11 June: The owner of British Gas announced in June that it intends to cut 5,000 jobs – a quarter of its UK workforce – in mostly senior roles, and remove three layers of management.

Johnson Matthey  2,500 jobs
11 June: The chemicals company, a major supplier of catalytic converters for cars, plans to make 2,500 redundancies worldwide over the next three years, 17% of its workforce.

Bombardier  600 jobs
11 June: The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.

Monsoon Accessorize  545 jobs
11 June: 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.

BP  2,000 jobs
8 June: The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK mostly in office roles, by the end of the year.

Mulberry  470 jobs
8 June: 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.

Bentley  1,000 jobs
5 June: The Crewe-based luxury carmaker intends to shrink its workforce of 4,200 by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme.

Aston Martin Lagonda  500 jobs
4 June: The Warwickshire-based luxury car manufacturer, struggling even before the pandemic, has announced 500 redundancies.

Lookers  1,500 jobs
4 June: The car dealership chain said it plans to cut 1,500 jobs and close 12 dealerships just days after car showrooms were allowed to reopen in England.

Rolls-Royce  9,000 jobs
3 June: The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in sites in the UK.

The Restaurant Group  3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

EasyJet  4,500 jobs
28 May: The airline has announced plans to cut 4,500 employees, or 30% of its workforce, as it prepared for lower demand.

McLaren  1,200 jobs
26 May: McLaren Group, the Formula One team owner and maker of supercars, cut 1,200 jobs as it scrambled to save cash.

Clarks  900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Ovo Energy  2,600 jobs
19 May: 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.

JCB  900 jobs
15 May: Digger maker JCB said in May up to 950 jobs were at risk after demand for its machines halved due to the coronavirus shutdown.

Tui  8,000 jobs
13 May: Travel company Tui plans to cut up to 8,000 jobs worldwide in response to the coronavirus chaos engulfing the tourism industry.

Virgin Atlantic  3,000 jobs
5 May: Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.

Ryanair  3,000 jobs
1 May: The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.

Aer Lingus  900 jobs
1 May: The Irish flag carrier, part of International Airlines Group (IAG), plans to cut 900 jobs.

Oasis and Warehouse  1,800 jobs
30 April: The fashion brands were bought out of administration by restructuring firm Hilco in April, with all of their stores permanently closed and the loss of more than 1,800 jobs.

British Airways  12,000 jobs

28 April: The UK flag carrier plans to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline, with cabin crew, pilots and ground staff affected.

Meggitt  1,800 jobs

23 April: British engineering company Meggitt plans to shed about 1,800 jobs making parts for commercial aviation.

Safran  400 jobs

23 April: French aircraft seat maker Safran made 400 job cuts at its UK operations, including a plant in Cwmbran.

Cath Kidston  900 jobs

21 April: More than 900 jobs are to be axed with immediate effect at retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams  4,000 jobs

9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores, following its collapse into administration in April, for the second time in a year.

Laura Ashley  2,700 jobs
17 March: Laura Ashley collapsed into administration with 2,700 job losses and said rescue talks had been thwarted by the pandemic.

 

 

The luxury British brand, best known for its trenchcoats and signature check, had previously cancelled its end-of-year payment to shareholders, worth about £120m last year, and has borrowed £300m via the UK government-backed business support scheme.

The 500 jobs being axed represent about 5% of the group’s global workforce. The restructuring, which will include pooling expertise within three new business units covering ready-to-wear, accessories and shoes, will lead to one-off costs of £45m.

Marco Gobbetti, the chief executive, said: “We are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning.”

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The company said tourist travel, which generates strong sales for luxury goods companies, was “likely to remain negligible” for the time being while some stores remained closed or operating with reduced hours under coronavirus lockdown restrictions around the world.

Burberry said sales in established stores slid by 20% in June and it expected trading in the three months to the end of September to show a similar decline of 15% to 20%.

Gobbetti said: “Sales were severely impacted by the drop in luxury demand from Covid-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel.”

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