John Lewis puts hundreds of jobs at risk

John Lewis is cutting costs after it revealed a sharp fall in profits two weeks ago

Hundreds of jobs are at risk at the John Lewis department store chain after the employee-owned business, which has been battered by the recession, revealed plans today to shut its in-store call centers.

The branch centers, which deal with customer service inquiries, are being axed in favor of two big new “contact centers”, which will open next year in Glasgow and either Manchester or Newcastle.

Photograph: Darren Staples/Reuters

Some 700 staff are employed in the John Lewis branch call centers. The department store said there would be opportunities for staff to transfer to the new centers, which will take on 500 staff, or to be redeployed into shop-floor roles in the stores.

A spokeswoman for the chain said it was not yet known how many staff would move to new jobs and therefore how many were likely to be made redundant.

The cost-cutting move comes just two weeks after the 28-strong chain showed just how hard it is being hit by the economic downturn. Profits crashed more than 50% in the first half of this year. The stores made operating profits of just £21m in the six months to August – down from £43m over the same period in 2008 and £54m in 2008.

Sales of big-ticket home ranges, which are directly linked to the number of people moving home, were down more than 8%. Home wares account for more than a third of John Lewis sales and an even higher proportion of profits.

Andrew Murphy, director of operational development at John Lewis, said the existing branch-based call centers were inefficient and the new centers would offer better service.

“Having 25 separate call centers is not ideal in terms of efficiency and is also not the best way to ensure that customers always receive excellent service,” he said.

“The customer proposition will remain essentially unchanged, but the experience will be enhanced by improved information systems, telephone support over extended opening hours and the ability to bring different strands of best practice together.”