Migros cuts jobs - including in marketing and communications

The Federation of Migros Cooperatives (FMC) will simplify its organization and internal processes in central administrative areas, the "orange giant" announced in a press release on Friday. The departments affected include IT, HR, communications, marketing and finance, said spokesperson Luzi Weber on request. "Unfortunately, it is unavoidable that 70 jobs will be made redundant", Migros wrote. A further 70 jobs have already been cut since the beginning of the year due to natural fluctuation as people have left.

Moreover, a significant part of the reduction could be offset by early retirements and reductions in workloads.

Social plan as cushioning

In the event of redundancies, a social plan has been drawn up to cushion the impact. The aim is to find new employment for the affected employees within the Migros Group wherever possible. If necessary, the social plan provides for extensive support services. "I am aware that this is a shock for the employees affected. It is the beginning of a stressful time for them. It is therefore important to me that those affected receive good, professional support from us," explained Zumbrunnen. Migros stands by its social responsibility. "We understand that the FMC is also affected by the digital transformation and has to reduce resources in certain areas and build up resources in others in order to keep the company fit in the long term.

However, job cuts should only ever be a last resort," explained Caroline Schubiger from the Kaufmännischer Verband (KV), Migros' social partner. The social plan is good. The FMC is fulfilling its role as a socially responsible company. "Nevertheless, we expect an internal follow-up solution to be found for as many employees as possible", explained Schubiger.

First horse cure in a long time

This is a hard blow for Migros' corporate headquarters. The last major reorganization at FMC was around 14 years ago, said Weber. Back then, over 100 jobs were lost. The current cutbacks come as no surprise. The Handelszeitung reported on the plans eight days ago. The Federation of Migros Cooperatives employs a total of 2,700 people. The vast majority of them work at the headquarters on Limmatplatz, said Weber.

The FMC is the central service company of the Migros Group. With the restructuring, the FMC wants to counter the shift in retail trade from the stores to the Internet and the increasing competition from international online providers, it said. Spokesman Weber did not want to say how many costs would be saved as a result. However, it is not just a cost-cutting exercise. "After three years of declining profits, the FMCG does not want to use these measures to cut costs, but to free up more funds for investments in future areas," the retail group wrote. Migros wants to create new jobs in these areas, which will be evaluated and expanded in a further step.

Profit slump in 2017

Last year, despite record sales, the retail giant suffered a drop in profits of almost a quarter to 503 million francs. The last time net profit was lower was in 2003 at 372 million francs. Migros wants to earn more again this year. "Profits must increase. Nobody can be satisfied with this result," Zumbrunnen said at the annual media conference in March. It will help that the value adjustments, which had a one-off impact on the result in 2017, will no longer be incurred in 2018.

Investments in the Internet

Migros intends to continue investing in digitalization. Zumbrunnen said that there is great potential for growth in this area. The aim is to remain the largest online retailer in Switzerland. In terms of online sales, Migros is scratching at the CHF 2 billion mark. Zumbrunnen sees opportunities for synergies in the online offering, not least with the Digitec Galaxus marketplace, as he said recently. The SportXX specialty store, for example, has a strategy that combines the online and in-store offering. At the same time, SportXX could also be positioned advantageously on the Galaxus marketplace. The Migros Group's Internet showpiece, Digitec Galaxus, aims to break the 1 billion sales mark this year. Last year, the online retailer increased its turnover by almost a fifth to CHF 861 million. (SDA/hae)