Boots to cut 4,000 jobs as John Lewis to shut eight stores, putting 1,300 jobs at risk – as it happened

And finally, here’s our latest news story on today’s job losses:

Boots and John Lewis have announced plans to cut 5,300 jobs and close stores on another bleak day for the UK high street.

Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

The company, which has 2,465 stores, said it was accelerating a restructuring plan after sales at its main Boots outlets dived 72% and sales at Boots Opticians slumped 48% during the coronavirus lockdown on the high street.

John Lewis also announced on Thursday that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

That’s all for today. Thanks for reading and commenting. GW

Today’s flurry of job cuts came as Britain’s leading tax and spending thinktank has criticised the flagship policies in Rishi Sunak’s £30bn summer statement.

The Institute for Fiscal Studies said the key measures were badly timed, poorly targeted and likely to do little to stop unemployment from rising.

My colleague Richard Partington explains:

The IFS said most of the £9.4bn allocated for the government’s £1,000 job retention bonus scheme – to incentivise employers to take back furloughed staff – would be spent on jobs that were already safe.

It also said tax increases would be required from 2022 onwards to pay for the government’s Covid-19 response, while warning that the government’s budget deficit – the gap between state expenditure and tax revenue – would reach £350bn this year, the highest level in peacetime for 300 years.

Announced as the focal point of Sunak’s speech on Wednesday, the £1,000 bonus plan is designed to ease the transition from the more generous furlough scheme, which pays 80% of workers’ wages up to £2,500 per month. As many as 9.4m jobs have been furloughed, at a cost to the exchequer so far of £27.4bn, with the government hoping that the companies will take back workers at £1,000 a head rather than lay them off when the job retention programme ends on 31 October.

The UK government took another step towards reopening the economy this afternoon, announcing plans for beauty salons, spas, gyms, pools and leisure centres to restart.

However, there will be restriction on how these places operate, including reduced class sizes and booking systems.

Culture secretary Oliver Dowden has also said musicians and artists can perform live outside from this weekend – an “important milestone”.

Our main UK coronavirus liveblog has all the details:

Time for a recap:

Thousands more jobs are being lost across the UK as businesses reel from the impact of Covid-19, prompting criticism that the government isn’t doing enough to support the economy.

High street bellwether John Lewis is shuttering eight stores, including full-size department stores in Watford and Birmingham. Four ‘At Home’ shops at Croyden, Newbury, Swindon and Tamworth are closing permanently, and small outlets at Heathrow and St Pancras as also being axed. In total, 1,300 jobs are at risk.

John Lewis blamed the move towards online shopping, which has accelerated as people have obeyed the lockdown and worked from home

Chair Sharon White said it was necessary to close these sites, which had all been struggling before the pandemic. Another 42 stores are being reopened.

But the move was heavily criticised by former managing director Andy Street, now mayor of the West Midlands. He claimed shutting the Birmingham store would be a “terrible mistake”.

Around 4,000 staff are also being let go at high street chemist Boots. Its owner, Walgreens, has decided to cut staff and close scores of Opticians outlets, after suffering a dramatic slump in takings.

Visits to Boots stores tumbled 85% in April, with customers keeping away even though such essential shops remained open.

Sebastian James, the managing director of Boots UK, said the cuts would create “a stronger and more modern Boots”

“We recognise that today’s proposals will be very difficult for the remarkable people who make up the heart of our business, and we will do everything in our power to provide the fullest support during this time.”

Boris Johnson’s spokesman says the government will do everything it can to help.

But…opposition MPs have blamed the government.

Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, said Rishi Sunak should have announced more focused measures yesterday, rather than meal deal vouchers and a blanket £1,000 bonus for taking furloughed staff back:

“The Chancellor’s statement was a missed opportunity to protect jobs with properly targeted support for the businesses and people that need it.

“Ministers must acknowledge that different parts of our economy face very different challenges in the months ahead and come forward with a real plan to protect jobs in sectors fully closed or only partially reopened, and develop an urgent programme to boost retailers and save our high streets from becoming ghost towns.”

Hundreds of jobs are also being cut at Wales Celtic Manor Resort, with billionaire owner Sir Terry Matthews criticised for not providing more support to staff.

Rolls-Royce is also pressing on with a job cuts programme – 2,000 staff are expected to take voluntary severance by August. It has burned through £3bn of cash since the pandemic began, as its lucrative engine servicing business has dried up.

The UK boss of Burger King has hinted that one in 10 of its outlets could close, costing 1,600 jobs.

US companies are also struggling, with Harley-Davidson announcing 700 job cuts….and new data showing that more than 1.3 million Americans filed new claims for unemployment support last week.

Anxiety over the global economy has also hit stocks in Europe and the US today. The blue-chip FTSE 100 lost 1.7% today, and just closed at its lowest level since late May.

Anxiety over the economic pain of the Covid-19 pandemic is also hitting global stock markets.

A burst of selling on Wall Street has triggered losses in Europe, with the FTSE 100 down 98 points or 1.6% in late trading.

Traders are pointing to the latest surge in Covid-19 cases in America:

Travel companies and retailers, who suffer badly from lockdowns and physical distancing restrictions are among the fallers.

CNBC explains:

Shares of companies that would benefit from the economy reopening struggled. United Airlines, Delta and American all fell more than 4%. Carnival Corp dropped 3.7% and Royal Caribbean slid 5.3%. Kohl’s declined by 5.8%.

Even Harley-Davidson can’t escape the shadow of job cuts.

The motorcycle maker has just announced plans to cut 700 positions worldwide, as part of an overhaul to create a “leaner, more nimble organization”. That’s about 14% of its workforce, Marketwatch estimates.

Company share prices have a nasty habit of rising when job cuts are announced – but not today.

Walgreens shares have tumbled almost 9% in New York, after it announced it was cutting 4,000 UK staff after suffering a slump in sales.

CNN says the problems in the UK have highlighted the economic cost of the pandemic:

Although the layoffs make up 7% of its Boots workforce, it’s a tiny fraction of the 440,000 Walgreens employees worldwide. Still, it’s a sign of the financial challenges Walgreens faces during the Covid-19 pandemic.Walgreens announced the layoffs Thursday alongside downbeat quarterly results.

Adjusted earnings fell more than 43% — worse than analysts expected — and the company posted an operating loss of $1.6 billion.

In another blow, hundreds of jobs are being cut at Wales’s Celtic Manor.

The Newport-based company, which hosted golf’s Ryder Cup in 2010 and the 2014 Nato Conference, told staff today that around 450 of its 995 posts are to be made redundant.

It blamed the “catastrophic effect” of the coronavirus pandemic on tourism, saying (via Wales Online):

“It is clear the Covid-19 crisis will continue to have a catastrophic effect on the global economy, our nation and the travel, tourism and events industries for many months to come, and the Celtic Collection must reshape and resize its business to ensure that it is fit for the future.

“With drastically reduced occupancies and revenues, its current financial model is not sustainable.

“Staff whose positions are at risk of redundancy have been sent letters advising them of the process.”

As well as one of the UK’s top hotels, the Celtic Manor Resort includes an international conference centre, and several golf courses.

It was built by Welsh-Canadian business magnate Sir Terry Matthews, who built his fortune though telecoms and has ploughed a lot of it into the Newport site.

Plaid Cymru Senedd Member for South Wales East Delyth Jewell has called on Matthews to use his “amble means” to keep all staff employed until the economy has recovered.

The site shut down in the pandemic, but is due to reopen next week.

Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, says retailers such as John Lewis and Boots need more targeted support from the government:

“This is deeply worrying news for staff at John Lewis and Boots and the travel hubs and town centres these stores are in. These announcements underline the dangers facing our high street, as many businesses struggle to survive through the Covid-19 crisis and the necessary public health measures which limit capacity and demand.

“The Chancellor’s statement was a missed opportunity to protect jobs with properly targeted support for the businesses and people that need it.

“Ministers must acknowledge that different parts of our economy face very different challenges in the months ahead and come forward with a real plan to protect jobs in sectors fully closed or only partially reopened, and develop an urgent programme to boost retailers and save our high streets from becoming ghost towns.”

West Midlands mayor Andy Street, the former managing director of John Lewis, says the company is wrong to shut the Birmingham department store (which he opened five years ago).

Street says John Lewis’s failure to make a success of the store is “extremely disappointing”.

He believes it can still be a success, and has pledged to make the case for keeping the store open, saying:

At this stage the closure is only a proposal, and one I believe risks being a terrible mistake. Therefore I will be making the case for why the company should not give up this tremendous opportunity in Birmingham.

However, John Lewis said this morning that the eight stores being shut were all struggling before the Covid-19 pandemic, so it may not see the same opportunity as Street….

Boris Johnson’s spokesman has told journalists in Westminster that the government will help John Lewis and Boots workers “in any way we can”.

But… chancellor Rishi Sunak’s new £30bn mini-budget package is already meant to be providing support. Those measures, including a £1,000 bonus for taking back furloughed staff, didn’t prompt a last-minute change of heart at either company.

Labour MP Bill Esterson points out that manufacturing is also struggling.

As covered earlier, 2,000 Rolls-Royce staff are expected to take voluntary redundancy or early retirement by August, following the slump in air travel.

The scale of the job cuts being imposed at Boots and John Lewis shows that Covid-19 is still battering the UK high street, says the FT’s John Eley:

John Lewis’s decision to shut two full-size department stores in large centres — the Intu complex in Watford and the Grand Central development above Birmingham’s New Street station — is likely to send shockwaves through the retail industry.

The 136,000 square foot Birmingham store opened in 2015 as part of an ambitious redevelopment of the city centre.

While most of Boots’ stores remained open during the UK’s 12-week lockdown, the company still reported much lower shopper numbers and refused to pay rent to many of its larger landlords while it renegotiated lease terms.

More than 100 of its larger stores in city centre, station and airport locations were closed, along with most of the Boots Opticians practices, while beauty and fragrance counters, which are major revenue drivers, were unable to operate.