M&S to outsource 250 technology roles in major IT reshuffle

Marks & Spencer (M&S) has announced what it described as a new “Technology Operating Model” on Tuesday afternoon, in a move that will see around 250 existing IT roles at the retailer outsourced to Indian business Tata Consultancy Services (TCS).

A consultation process will commence with M&S’s employee representative group, BIG, on 16 January, with the aim of transferring the roles under TUPE regulations, a measure that acts to preserve employees' terms and conditions during a switch of employer.

M&S said individual conversations will take place with around 30 individuals whose functions will be carried out differently in the future. The company indicated its aim is to retain “a smaller, more technical and commercially focused team”.

The Technology Transformation Programme is expected to deliver annual efficiencies of approximately £30 million by 2021/22, but there is a one-off cost of £25 million to implement the new initiative. The move comes after an extensive internal review of M&S’s technology capabilities.

Other changes that will occur include the creation of a new technology operating model, which M&S said will enable the company to more efficiently exploit new technology, including the adoption of “industry agile methods”. This move is effective from 1 March 2018. 

TCS will act as M&S’s principal technology partner, and the move is expected to simplify and consolidate the company’s tech supplier base. Core supplier services will transfer directly to TCS, and the day-to-day relationship and project management of specialist suppliers will be run by the tech company. 

M&S CEO Steve Rowe 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.”  

In November last year, online fashion house Asos overtook M&S in terms market value in what analysts described as a seminal moment in retailing, and an indication of the changing face of the industry, which is increasingly influenced by internet shopping.

This week's technology team reshuffle marks the first major strategic announcement following the September arrival of ex-Asda CEO Archie Norman as the retailer's non-executive chairman.