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John Lewis Partnership has implied that it could make job cuts across the business after it slashed its redundancy payouts, The Telegraph has reported.
It is understood that the employee-owned retailer told partners this week it was halving its current two-week redundancy pay per year of service policy as it was “higher than typical market practice and comes at a very high cost”.
The Waitrose owner offers “partnership redundancy pay” on top of statutory pay, which is set by the government.
The retailer told staff via an internal memo, which was seen by The Telegraph, 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”.
John Lewis reportedly needed to make the policy “more affordable to free up cash” it needed to support its turnaround plan.
The retailer said most of its staff would not be affected by the changes and maintained that partner redundancies were a “last resort”.
A John Lewis spokesperson said: “The partnership offers a generous and attractive range of benefits that includes a redundancy package, which will continue to be above the market.
“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.”
The news comes after the retailer’s senior management had proposed changes to “reset” the business’ current pay policy last week. Under its proposals, the partnership’s bosses would be handed more power to control performance-linked pay rises.
