The parent company Ceconomy wants to streamline the corporate structure and save 100 million euros a year. That could cost 3500 jobs.
The electronics chains Media Markt and Saturn face massive job cuts. The parent company Ceconomy is reviewing the cut of up to 3,500 full-time positions at the two retail chains, as he announced in Düsseldorf on Wednesday. According to Ceconomy, the job cuts would primarily affect jobs in other European countries. The company employs around 55,000 people worldwide.
The background to this are plans by the group management to introduce a group-wide, uniform organizational structure in the companies, which have been managed in a very decentralized manner for a long time. As a result of the increased centralization, numerous jobs could be lost. But that’s not all.
“In view of declining customer frequencies as a result of the Covid19 pandemic, the group is also considering closing deficient stores across Europe to a limited extent,” said von Ceconomy. Overall, the group management hopes that the measures will save just over 100 million euros a year. A decision on the implementation and scope of the measures should be made on August 12.
According to a Spiegel report, 20 branches could be closed in a first move, which would cost around 500 jobs. A spokesman for Ceconomy did not want to comment further on the report and the figures mentioned.
State aid for Corona crisis
The announcement of possible branch closings comes as no surprise. The electronics retailer is faced with major problems due to the corona crisis and also had to apply for state aid: In May the company received a loan from the state development bank KfW and a bank consortium in the amount of 1.7 billion euros.
Media Markt and Saturn quickly regained their footing after the corona-related store closings ended. In May, the retail giant’s sales of 1.55 billion euros were again 3 percent above the previous year’s level. At 1.75 billion euros in June, sales even exceeded the previous year’s figure by 12 percent.
Online business is booming
However, the weights between the sales channels in the group have shifted massively under the influence of the pandemic. The decisive factor in the rapid comeback of the electronics chains was the success of the online business, which grew by around 145 percent between April and June and now supplies more than a third of total sales. In contrast, many customers stayed away from the branches.
“The pandemic has definitely acted as an accelerator for our online business,” said Ceconomy boss Bernhard Düttmann in July. Even then he announced that this would also have an impact on the Group’s future strategy. “The markets will continue to play an important role in our omni-channel strategy, but we must and will adapt to changing customer behavior,” announced Düttmann. Apparently that is getting closer.