Debenhams to cut hundreds of jobs

Debenhams, the struggling department store, has cut hundreds of head office jobs, it has been confirmed.

The business has culled 160 jobs from merchandising, a similar number in buying, as well as some roles in human resources, according to Reuters.

All the staff who have now been made redundant were previously furloughed under the Government's Coronavirus job retention scheme.

A source told the news agency: “They’re just running on the bare bones now ... There were 16 people left within merchandising in the company.” The company confirmed there had been lay-offs but declined to give a number.

A spokesman for Debenhams said: “In the context of a retail industry undergoing profound change, the management team is working on the future shape of the group, with a view to seeking an exit from administration as a going concern.

“With a leaner and more flexible operating model, Debenhams will have the ability to adapt to what are likely to be fundamental shifts in the future trading environment.”

Debenhams is currently in a "light touch" administration, a move designed to help it get through the crisis intact. It is the second time in just over a year that it has been placed into administration; last year it was taken into administration and bought by a consortium of its investors in a pre-pack deal.

The investors are planning to re-open its stores and say they have secured the future of 120 sites (from a total of 142). These will begin re-opening from 15 June in line with Government COVID-19 regulations, with the 90 stores located in England being opened first.

In total the company employed 3,000 staff before the latest cuts.

The move will prompt fears that staff currently furloughed at other fashion retailers will be laid off as the Government begins to pull back on its support. The scheme, which allows businesses to claim for 80% of a staff member's monthly salary (to a maximum of £2,500) runs until July, after which the Government contribution will be reduced and companies will be obliged to top up pay.

Yesterday it was revealed that Debenhams had seen off a legal bid from Frasers Group chief Mike Ashley to have the company's finances investigated and a "provisional liquidator" appointed. Ashley had previously owned almost 30% of the company's shares when it was listed and had attempt to take control of the company himself, but had been repeatedly rebuffed by the investors who went on to buy the company themselves.