Coronavirus: John Lewis and Boots to cut 5,300 jobs



Boots and John LewisImage copyrightGETTY IMAGES

Two of the UK’s biggest High Street retailers, John Lewis and Boots, have announced 5,300 job cuts.

Boots has said 4,000 jobs will go, while John Lewis is shutting down eight stores, putting 1,300 jobs at risk.

The moves come amid warnings that new economic support from Chancellor Rishi Sunak will not be enough to stop millions of workers losing their jobs.

Mr Sunak admitted that he would not be able to protect “every single job” as the UK enters a “severe recession”.

Boots is consulting on plans to cut head office and store teams and shut 48 of its more than 600 Boots Opticians practices.

It has not yet said which outlets will close, but about 7% of its workforce will lose their jobs.

John Lewis said department stores in Birmingham and Watford will not reopen as the coronavirus lockdown eases. It also plans to shut down its At Home stores in Croydon, Newbury, Swindon and Tamworth and travel sites at Heathrow airport and London St Pancras.

Mr Sunak unveiled a series of measures on Wednesday aimed at saving jobs, including a one-off £1,000 payment to employers for every furloughed employee retained to the end of January 2021.

He also announced measures to benefit the hospitality sector, including giving diners 50% off eating out from Monday to Wednesday in August.

Culture Secretary Oliver Dowden said the moves to support restaurants, pubs and cafes could also help retail.

“We very much hope that when people go to their local pub or their restaurant to eat out, those are often in the centre of towns, hopefully that will encourage the footfall to those areas so we get more people going to our shops as well,” Mr Dowden said, speaking after announcing the reopening of gyms, indoor pools and outdoor theatres.

Analysis box by Simon Gompertz, personal finance correspondent

John Lewis says some of its stores were in trouble before the virus struck, while Boots already had plans for a shake-up.

The crisis has forced them to speed up efforts to deal with the rise of internet shopping.

And just now they face the phasing out of the government-supported furlough scheme, starting next month.

One by one, retailers are revealing how many staff they will bring back into stores as the job subsidy is withdrawn.

‘Uncertain economic outlook’

Most Boots outlets remained open throughout the lockdown to provide pharmacy and healthcare services, but the firm said footfall had “dramatically reduced”.

The firm said sales across all Boots UK outlets were down 50% in the third quarter, and some 70% at Boots Opticians.

“Restrictions are beginning to lift, but with an uncertain economic outlook, it is anticipated that the High Street will take considerable time to recover,” it said.

Boots said last year that it was reviewing the size of its UK operations with the possibility that up to 200 stores could be closed.

The managing director of Boots UK, Sebastian James, described the latest cuts as “decisive actions to accelerate our transformation plan”.

Boots storeImage copyrightGETTY IMAGES

John Lewis said the eight stores affected were already “financially challenged” even before the pandemic struck.

However, Covid-19 had caused customers to move more quickly towards online shopping and away from stores.

John Lewis Partnership chairwoman Sharon White said: “Closing a shop is always incredibly difficult and today’s announcement will come as very sad news to customers and partners.

“However, we believe closures are necessary to help us secure the sustainability of the partnership – and continue to meet the needs of our customers, however and wherever they want to shop.”

Ms White said John Lewis would do everything it could to keep on as many people as possible.

John Lewis had warned in March it could close shops as a plunge in profits forced it to cut staff bonuses to their lowest level in almost 70 years.

John Lewis storeImage copyrightREUTERS

Former John Lewis boss Andy Street, now mayor of the West Midlands, said the closure of the chain’s flagship Birmingham store was “deeply disappointing”.

“At this stage the closure is only a proposal, and one which I believe risks being a dreadful mistake,” he tweeted.

He added that his belief in its potential was “unwavering” and that he would be making the case for it to stay open.

The planned closure of John Lewis’s Watford store has prompted a petition to save it, which has been signed by 4,400 people so far.

Other John Lewis customers took to Twitter to vent their frustrations.

John Lewis and Boots are the latest in a long line of companies to have made cuts during the pandemic. Other lay-offs announced include:

‘Jobs loss tsunami’

Unions and analysts have warned that the virus could mean millions of people end up out of work, warning that government incentives to save jobs were not large enough to persuade bosses to keep workers.

Len McCluskey, general secretary of the Unite union, said: “With no modification to the jobs retention scheme, that dreaded October cliff-edge for businesses and workers has now been set in stone.

“Our fear is the summer jobs loss tsunami we have been pleading with the government to avoid will now surely only gather pace.”

Vivienne King, chief executive at Revo, which represents the retail property sector, warned that three million retail jobs remained in jeopardy unless the government undertook “a fundamental review of business rates and direct financial support to underwrite rents”.

Chancellor Rishi Sunak himself told BBC Breakfast: “Is unemployment going to rise, are people going to lose their jobs? Yes, and the scale of this is significant.

“We are entering one of the most severe recessions this country has ever seen. That is of course going to have a significant impact on unemployment and on job losses.”

Lucy Powell, shadow minister for business and consumers, said the job cuts were “deeply worrying news for staff at John Lewis and Boots” and described Mr Sunak’s statement as “a missed opportunity to protect jobs with properly targeted support for the businesses and people that need it”.