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Stealth layoffs by El Corte Inglés: 13,122 people in five years

Teresa Sánchez

On February 28th 2008, at the end of the last year before the financial crisis began, the company had a record 109,800 employees. But since then, the layoffs haven't stopped.

At February 28th 2013, the company had 96,678 workers. However, it's also important to note that the El Corte Inglés workforce at year-end is larger than the average for the year as a whole as it hires a large number of seasonal workers during the holiday period and end-of-season sales.

Nevertheless, in view of the average workforce, the decline is astounding. El Corte Inglés ended the year with 86,482 employees, i.e. 10,846 less than the 2007 average.

What are the reasons behind these redundancies? In the last five years of crisis, the company had, among other assets, 86 department stores (84 in Spain and 2 in Portugal) and 42 hypermarkets.

However, in 2007, it increased its workforce notably, but only had 70 stores and 34 hypermarkets, i.e. the group has many more stores and much fewer workers. This is attributable to the nosedive in consumer spending in Spain, which led to an 18.6% reduction in revenues, from 17.897 billion euros to 14.552 billion in the last year. Profit shrank by more than four times, from 747.59 million euros to 171.5 million.

In 2007, El Corte Inglés created stable quality jobs for young people (workers' average age at that time was 35). It was also a pioneer in signing the Equality Plan, with unanimous support from all unions, and was especially dedicated to staff training, offering 9,600 courses and more than 2 million contact hours to help with specialization and professional development.

"A total of 2.4% of staff (2,604 employees) have been promoted. There's still a high degree of company loyalty, with average seniority of 10 years," said company chairman Isidoro Álvarez at the Shareholders' Meeting in August 2008.

But this has all changed, because the department store chain has to reduce costs however it can to avoid booking losses, not only because poor results could damage the company's image, but also because it would be negative for the economy in general.

According to industry sources, "For El Corte Inglés to be in the red would be a major blow to consumer spending, and pessimism would skyrocket because the company has always been considered an invincible power.

The company's sizeable layoffs are only comparable in the retail sector with Eroski's initiatives, although in the case of the latter, instead of layoffs, the company had to make cuts when transferring the workforce (and selling stores) to other companies.

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