Burberry, the luxury clothing company, announced 290 job cuts yesterday as a fresh wave of redundancies swept across British industry.
Burberry was one of three leading European retailers, also including Vion, the Dutch-owned food business, that disclosed a total of about 1,000 fresh job losses. Nearly 9,000 jobs have been lost by leading British companies in the past week.
The cuts came as figures showed that almost two million people are unemployed, with the numbers claiming jobseeker's allowance standing at more than one million. The UK's official unemployment total, counting those not eligible for benefits, reached 1.86million people out of work last October, a ten-year high.
Howard Archer, chief UK economist at Global Insight, said: “Reports of companies laying off workers are becoming more and more prevalent. Unemployment is poised to rise above two million imminently and it seems ever more likely to reach three million in 2010.”
Burberry, a 153-year-old business famous for its check-patterned raincoats, said that the redundancies, which also include 250 jobs in Spain, would save between £30million and £35million. “It's extremely challenging, volatile and difficult,” Stacey Cartwright, its chief financial officer, said of present trading conditions.
The company angered unions by closing its sewing factory in Rotherham, South Yorkshire, without telling workers. Tim Roache, regional officer of the GMB union, said: “The GMB and its members were given no notice of this announcement. The first we heard of it was from the media. It is completely outrageous.”
Burberry reported a 9 per cent increase in group revenue for the last three months of the year but retail sales fell by 3 per cent in the last quarter, driven by poor performance in the United States and Spain, where sales of the luxury brand slumped by 20 per cent.
Burberry's shares closed up 25p, more than 12 per cent, at 231p.
The biggest cuts announced yesterday were at Vion, which shed 470 jobs at its Haverhill site in Suffolk, 200 at Malton in North Yorkshire and 150 at Cambuslang in Scotland. Vion said that it was operating against a backdrop of a competitive marketplace and overcapacity in the meat sector in Britain.
Alasdair Cox, its corporate affairs director, said: “We regret the need for these changes in our activities announced today and have informed our employees and their union representatives of our commitment to consult with them.”
A spokesman for Unite said that the job cuts showed how vulnerable supply-chain companies in the food industry were to the demands of customers such as the big supermarkets. The union was seeking urgent talks with Vion and would resist any compulsory reduncancies, the spokesman said.
Metro, Europe's second-biggest retailer, after Carrefour, of France, said that it would cut 15,000 jobs globally by 2012, although it was not known how many of these would be in the UK. The German-based company, which employs 300,000 people in 2,200 stores across 32 countries, has 33 outlets in Britain under the Makro Cash and Carry name.
Wavin, the Dutch plastic pipe maker, announced plans to lose 165 jobs in Britain as part of a restructuring programme. Rio Tinto, the mining group, announced that it would cut 1,100 jobs worldwide.
Out of work
UK job cuts announced yesterday
— 820 jobs at Vion, the Dutch food company; 470 will go at its Haverhill site in Suffolk, 200 at Malton in North Yorkshire and 150 at Cambuslang in Scotland
— Burberry loses 290 jobs in Rotherham
Overseas job cuts
— BHP Billiton will 2,100 jobs, largely in Australia
— Warner Bros Entertainment, the film division of Time Warner, said that it would cut about 800 jobs, or 10 per cent of its staff
— Bose, the American high-end audio equipment maker, said that it would cut 1,000 jobs or 10 per cent of its workforce
