Retail giant Marks & Spencer is set to cut up to 500 jobs at its head office in London as part of efforts to reduce costs, it has been widely reported over the weekend.

According to a Sky News report, the retail giant will axe around 15 per cent of the roles at its headquarters in Paddington, London. More than half of the planned job cuts will affect contractors.  

An M&S spokesman said the group would never comment on "rumour and speculation", but added: "We said at our preliminary results in May that organisation was an area of the business that needed further consideration." 

The cuts follow a review of the company's structure by chief executive Steve Rowe after like-for-like sales in its clothing and home department dropped by 8.9 per cent.

Last week the department store finalised its consultation on pay changes which had been widely criticised by staff backed by MPs and council members who joined a demonstration.

M&S promised a 14.7% rise in basic pay for shop floor staff to £8.50 an hour - and £9.65 in London - from next April, well above the living wage of £7.20 and the voluntary rate of £8.25, and £9.40 in the capital.

But premium payments for Sunday working will stop, and there will be one standard payment for bank holidays, meaning that some long-serving staff would see pay cut by thousands of pounds.

The Labour MP Siobhain McDonagh said: "While we are obviously glad that the new offer is better with regard to pay compensation packages, it still falls short...they will earn no more money in three years' time than they do today."

Sacha Berendji, M&S retail director, said: "We've listened to our colleagues, acted on their feedback and are pleased that we've reached an outcome that gives enhanced support for our colleagues as well as making necessary changes to our business. From April 2017 our people will be among the highest paid in UK retail and receive one of the best benefits packages. The changes will reward our people in a fair and consistent way, simplify and modernise our business and help us attract and retain the best talent."