Marks & Spencer new chief executive Steve Rowe to retain control over its troubled clothing division
Marks & Spencer is set to axe 500 jobs at its London headquarters as it seeks to boost its fortunes Reuters

Struggling high street giant Marks & Spencer is set to axe around 500 jobs at its London headquarters as the group looks to turnaround its fortunes. The group is expected to announce the cuts, which amount to 15% of the workforce at its Paddington head office later this week.

Chief executive Steve Rowe, who replaced Marc Bolland in April, is under pressure to cut costs and show how he can improve the chain's long-running poor sales figures at its key clothing division.

An M&S spokesperson said: "We said at our Prelims results in May that organisation was an area of the business that needed further consideration and that we would update on this in the autumn."

"We would never comment on rumour and speculation and have nothing further to add."

Like-for-like sales at the group's fashion and home unit slumped 8.9% compared to a year ago when it posted first quarter sales in July. City analysts said this was the sharpest fall at the chain's problem department in a decade.

Rowe has promised to outline plans to revive the chain's fortunes when he delivers a comprehensive review in November.

The news comes after M&S only last week reached agreement with staff in a dispute with staff over the scrapping of premiums for working Sundays and bank holidays. It is also closing its final salary pension scheme.

The retailer, long regarded as one of the best employers in the sector, said staff would receive a 14.7% pay rise under an improved offer following the campaign against the company.

It said customer assistants will receive £8.50 an hour – £9.65 in London – from next April, well above the Living Wage of £7.20 and the voluntary rate of £8.25, and £9.40 in the capital. But premium payments for Sunday working will stop, and there will be one standard payment for bank holidays.