Yahoo Finance John Lewis scraps staff bonus after £234m loss
John Lewis (JLH.L) cancelled staff bonuses for the second time in three years and warned of fresh job cuts as the department store firm reported a £234m ($282m) pre-tax loss.
The group said it made a pre-tax loss of £78m, compared with analysts’ expectations of £50m, but write-downs of the value of Waitrose stores after poor trading pushed the group £234m into the red.
Chairperson Sharon White hinted that the firm may have to reduce staff numbers as the cost of living crisis had hit the partnership and its customers hard.
"As we need to become more efficient and productive, that will have an impact on our number of partners,” she said.
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Previous simplification efforts included changes to its head office, which resulted in 1,500 jobs being cut by 2021.
Waitrose sales declined by 3% to £7.3bn, while John Lewis recorded 0.2% growth to £4.94bn.
White said Waitrose had attracted 800,000 more customers but each had spent less.
The John Lewis chairperson apologised to staff that they would not receive a bonus payment following a “tough set of results”.
In a letter to staff, she said: “You’ve been exceptional in what has been another very tough year. Two years of pandemic and now a cost of living crisis.
“Inflation has had a big impact on the partnership and sent our costs soaring — up almost £180m on last year.
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“I am sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay.”
It is only the second time in 70 years that John Lewis will not pay staff a bonus.
White said the group was responding to its difficulties by tripling its target for cost savings to £900m by January 2026.
“The mantra for the year is cost out, margins up and customer focus,” she pledged.
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