The John Lewis Partnership (JLP) is to halve its redundancy pay package for workers as the troubled retail giant continues to slash costs as part of its major overhaul.
The move has ratcheted up concerns that more job cuts could be imminent at the retail group, which runs the department store chain and Waitrose grocery business.
Workers were informed on Thursday morning that the group will water down part of its partnership redundancy pay plan.
It said the group’s redundancy pay package, which gives workers two weeks of redundancy pay for every year at the business, will be reduced by half to provide one week of pay per year as a partner.
This is in addition to statutory redundancy pay.
JLP said the move will provide it with more funds to put towards supporting its budgets and could be put towards its next pay review.
“It’s fair to say that the high cost of redundancy pay has been one of the things that’s prevented us from moving as quickly as we’ve wanted to transform ourselves for the future, and has restricted our ability to invest more in pay,” the firm said in the internal memo.
The group said it would also change the plan so that the minimum payment for redundancy is four weeks of salary, up from a current minimum of one week.
A JLP spokeswoman said: “We offer a generous and attractive range of benefits that includes a redundancy package, which will continue to be above the market.
“We’re making changes as a high proportion of our current benefits package is weighted towards partners after they have left, when we want to better reward those currently working for us.
“These changes will allow us to invest more in our partners still within the business.”
The company has cut thousands of jobs since it launched its turnaround plan almost four years ago, through the closure of high street stores as well as head office redundancies.
Thursday’s announcement comes after the employee-owned business cautioned in March last year over further potential job losses as it sought to more aggressively turn around the business.
In its most recent performance update in September last year, JLP slumped to another financial loss, although this narrowed to £59 million amid its continued turnaround efforts.
Chairwoman Dame Sharon White also warned that the five-year transformation plan launched by the retail group in 2020 will take two years longer than planned.