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09 February 2018

Debenhams one of many retailers shedding jobs in bid to cut costs

The popular department store group is set to cut 320 store management jobs as it attempts to drive down costs, it's been announced.

The announcement comes a month after the chain said it was stepping up on cost-cutting plans after it issued a profit warning because of disappointing trade over the Christmas period.

Debenhams says that it has identified "significant cost savings by reducing the complexity of management roles in stores".

"We are currently consulting with individuals affected and will seek deployment opportunities where possible," the store said in a statement.

The 320 jobs cut will amount to a quarter of all managerial roles. The new store structure is expected to be fully in place by the end of March.

Debenhams is not the only large-scale chain cutting jobs. Supermarket chains such as Tesco, Sainsbury's and Morrisons have all announced plans to cut thousands of jobs, including many middle-management roles.

Tesco alone is set to shed around 1,700 jobs in its restructuring process, including employees in HR and customer service roles. It expects the hefty cut to cut costs by £1.5 billion. In January, the company's Cardiff-based call centre closed, causing the loss of 1,100 jobs.

Speaking about the latest round of cuts, Matt Davies, chief executive of Tesco's UK and Ireland business, said: "These changes remove complexity and will deliver a simpler, more helpful experience for colleagues and customers. We recognise these are difficult changes to make, but they are necessary to ensure our business remains competitive and set up for the future."

Supermarket chains are having to rethink their businesses amid aggressive competition from Aldi and Lidl, as well as a consumer switch to shopping online and uptake of small local stores. Business rate changes and the apprenticeship levy have also added to costs, and the National Living Wage increase is also taking its toll.

Tesco chief executive Dave Lewis said that, despite "phenomenal" growth in food sales, non-food sales were disappointing, and the business had not delivered the overall "slam dunk" it had expected to.

While Tesco, Morrisons, Waitrose and Asda all lost market share in the three months up to December 31st, Aldi and Lidl both increased sales by a combined 16.8%, drawing in an extra 1million shoppers in the run-up to Christmas.

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