Marks & Spencer said to be cutting 500 head office staff

Marks & Spencer is to cull 500 staff from its Paddington HQ, according to reports this weekend.

Sky News says the cuts represent around 15% of the head office workforce and around half of those affected by the move will be contractors; stores will not be affected. It is believed a consultation period will begin on Thursday.

The news broke just as Marks & Spencer concluded a new pay deal with staff, which it said would make them "amongst the highest paid in UK retail" and with better benefits. Some staff, however, maintain they will be out of pocket as a result of the deal since premiums for Sunday working and unsociable hours have been cut.

According to Sky News the company declined to comment on the reports saying only that it had highlighted that organisation was a focus for the business when it announced its numbers in May and it would be updating on plans this autumn.

M&S has been struggling for years to reverse a poor performance in its fashion business. In the three months to 2 July 2016 it recorded a 9% drop in clothing and home sales, which was worse than expected. Analysts had been expecting around 6%.

At the time CEO Steve Rowe, who replaced Marc Bolland at the head of the retailer at the start of the year, said the business had taken the decision to reduce promotional activity, lower its prices and push its summer sale back, which accounted for some of the drop. But M&S was also hit hard by unfavourable weather and a drop in consumer confidence prior to the Brexit vote in June.

Marks & Spencer's Archive by Alexa collection

Despite the drop Rowe insisted there were "encouraging early signs" that the long-anticipated fashion turnaround was on its way. The company has been pushing hard to find a solution with initiatives such as collaborative collections with designers and celebrities, such as Archive by Alexa [Chung] and more trans-seasonal product.