Marks & Spencer will outsource the majority of its in-house IT department to Indian conglomerate Tata Consultancy Services as it bets on a technology overhaul in a bid to turn its fortunes around.
Launching a new ‘technology transformation programme’, the retailer said that about 250 roles will move to TCS from March 1, but will remain based at the firm’s headquarters in Middlesex.
About 30 roles are set to change following the move and M&S said it will consult with staff affected next week. It will also retain a small in-house IT team of around 170 people and stressed it was not making staff redundant.
IT overhaul: M&S said the move will save it around £30million a year
The programme, which also includes a simplification of its IT supplier base, is part of M&S’ five-year plan, which has seen it retreat from Asia to focus on its UK business, close down poorly-performing stores and slow down the opening of its Simply Food stores.
M&S said the move will save it around £30million a year over the next four years, but also said it will take a one-off hit of £25million.
The announcement comes ahead of the retailer’s Christmas trading update, which is scheduled for Thursday and is expected to show a decline at its troubled women’s fashion arm.
Neil Wilson, senior market analyst at ETX Capital, said M&S had fallen way behind in its online offering and so it needed ‘a major revamp to stay relevant’.
As retailers update the market about their festive periods, those which have invested in their digital resources seem to have fared better than those who haven’t.
High street fashion retailer Next, which last week emerged as a winner over the Christmas period, posted a 1.5 per cent increase in sales in the period.
That was thanks to the retailer’s large online operation, which climbed nearly 14 per cent, which helped offset a 6.1 per cent decline in store sales in November and December.
Debenhams, however, downgraded its profits forecast after disappointing sales over Christmas.
Steve Rowe, chief executive of M&S, said: ‘We are committed to transforming M&S for our colleagues, customers and shareholders by delivering digital-first retailing across our stores and offices.
‘Technology plays a huge role in this transformation – and having the right partners and model will enable us to be more agile, flexible and responsive.
‘Through our Technology Transformation Programme, our business will be faster, simpler and more focused on achieving a seamless customer experience.’