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Wilko plans to cut 400 jobs as part of a restructuring after drop in sales

By Nagasunder in UK Business News, posted February 16, 2023

Wilko will cut more than 400 jobs, including assistant store managers, retail supervisors, managers, and call centre workers, as part of its latest cost-cutting effort.

The company has informed employees that it intends to reduce team supervisor hours in 150 of its 401 locations.

Following a drop in sales, this will result in the equivalent of about 150 full-time equivalent job losses.

Around 150 assistant store managers and 95 workers from its contact centre in Worksop, Nottinghamshire, have also been laid off.

The company will outsource dozens of head office management roles in commercial, retail operations, merchandising, marketing, and finance to a South African company later this month.

One member of staff said the changes in stores and the head office, on which a consultation began this week, came as “sales remain poor and rumours are rife about the future of the business”, which has been struggling to pay suppliers.

Mark Jackson, the chief executive of Wilko, said: “We’ve identified significant changes to the Wilko operating model to enable us to stabilise the business and then thrive again. This includes some proposed changes to our management structure at both our stores and head office.

“We’re fully supporting affected individuals. We know change will be unsettling to our team members and the wider business, and we’re acting swiftly to put in place the new organisational structure to stabilise and grow.”

The GMB union supposed it was consulting with Wilko, which employs 16,000 staff in total, in an effort to decrease job losses.

Nadine Houghton, GMB national officer said: “Wilko is going through significant changes at the moment and ultimately the business is in a fight for survival,”.

“We are seeing continued and increasing job losses throughout the retail sector and this is something that warrants an urgent, strategic response from the government.”

The discount retailer borrowed £40 million from restructuring specialist Hilco and restructured its leadership team as it faced a cash crunch following a loss.

At least one credit insurer has dropped the retailer, causing some suppliers to halt deliveries.

Wilko told suppliers in a meeting before Christmas that it was "debt free," but lacked the funds to pay them in full.

Former Bensons for Beds chair Chris Howell has taken over as chair from founding family member Lisa Wilkinson, after another former Bensons executive, Mark Jackson, stepped in as CEO before Christmas, the group's third in three years.

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Wilko's difficulties come as the number of shoppers out and about remains more than 10 percent lower than before the pandemic.

While consumer spending has been higher than expected in recent months, retailers say customers are being more cautious about what they buy as energy bills, food costs, and mortgage rates rise.

Source: The Guardian