Around 500 jobs will go at luxury fashion firm Burberry as it axes office space and makes cuts after lockdown sent sales tumbling.
The firm said around 150 office roles are expected to go in the UK, where it is headquartered, and a further 350 overseas as it looks to slash annual costs by a further £55 million.
The shock move follows previously announced £140 million savings and will affect around five per cent of its 10,000 employees, including four per cent of its 3,500 staff in the UK.
Burberry said it would also look to axe some office space as home working has proved successful amid lockdowns worldwide.
The group did not say how many offices would be closed or where, but confirmed it would keep its Horseferry Road HQ in London and its Leeds site.
It also stressed UK retail and manufacturing jobs would not be affected by the latest cost-cutting plans after it revealed comparable retail sales plunged 45 per cent in the three months to June 27.
London was among the cities particularly badly impacted, as the firm makes much of its sales in the capital from tourist trade, which was been decimated by the grounding of planes during lockdowns.
Marco Gobbetti, chief executive of Burberry, said: “Sales were severely impacted by the drop in luxury demand from Covid-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel.”
The group also warned it expects its second quarter to the end of September to be “materially impacted” by the pandemic, with sales forecast to drop by up to 20 per cent.
It said trading in the second half will “largely depend on the actions governments pursue to control the spread of the virus as economies restart”, including the potential for a second peak of the pandemic and additional lockdowns.
