Marks & Spencer plans to slash the redundancy benefits for its 60,000 staff by up to 25 per cent in a move that has infuriated employees and triggered fears of a middle management cull.

In an internal memo seen by The Times, the high street retailer is proposing to reduce the maximum payout that employees can receive in relation to their length of service from 70 weeks to 52 weeks.

Anyone aged over 41 would receive only three weeks’ pay for each year they had worked at M&S if made redundant, compared with 3.75 weeks’ pay at present. M&S wants to introduce the new conditions by September 1.

Employee representatives have warned the M&S board that the proposed changes had caused “an unprecedented level of feedback, concern and anger”.

In a letter sent to management last week they added: “There is zero confidence that we will not be entering another round of redundancies, and a strong suspicion that this is one of the reasons behind the proposal.”

They claim that the cuts present a stark contrast to the £500,000 payout handed to Steven Esom, the M&S food director ousted last month after being judged as “not delivering”. One M&S employee said: “One wonders whether our talent for alienating customers is now being applied to staff.”

An M&S spokeswoman said that the new proposals put the group in line with other retailers but added that the new terms were still more favourable than most of its rivals. She insisted that there were no plans to cut jobs.

However, the GMB trade union, which was embroiled in a fierce row with M&S earlier this summer over the planned closure of a ready-meals factory, said that it feared a fresh round of lay-offs was inevitable. A GMB spokesman said: “These proposals tell me that there is going to be a lot of VERs [voluntary early retirements], a cull of middle management. To me it just indicates that M&S is desperate to save money.”

Retailers are under intense pressure to cut costs and it emerged at the weekend that Homebase, the DIY group, was planning to realign working patterns by changing shifts at one third of its stores.

M&S has been among the hardest hit by the fallout from the credit crunch on the high street. The retailer halved staff bonuses in May despite reporting pretax profits of £1 billion. Sir Stuart Rose, the executive chairman, blamed the tough trading environment. Analysts believe that pretax profits at M&S could fall to £700 million in the current financial year after a profit warning last month.

The proposed changes to the retailer’s redundancy benefits would still leave M&S staff with one of the best packages on the high street, and twice the level of the statutory payout.

In the memo, M&S claims that the new limit of three weeks’ pay for every year worked by anyone older than 41 matched that on offer at John Lewis, and beats Gap, the Coop, Next and the Arcadia group by some margin.

However, a typical employee aged 49 with 30 years of service would see their potential payoff fall by £9,000 to £26,000. Employees aged between 22 and 40 would receive two weeks for every year, down from 2.5 weeks.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive