STAFF will have to wait to hear their fate following Marks & Spencer's announcement that they are looking to cut 1,000 financial service and head office jobs in the next two years.

This has come as shock news to employees at the company's financial services centre on Chester Business Park, which currently employs 1,500 personnel.

Those facing the axe will not be appeased by hopes the potential loss of the first 500 jobs could save £25m a year.

Following disappointing trading performances, Marks & Spencer broke the news last Friday that they will carry out a review of selected administrative and financial posts to increase efficiency.

Early indications have predicted the workforce in these sectors may be slashed by 20% - bringing the number of staff nationally down to 4,000.

While customer assistants and managers in Chester's Foregate Street stores will not be affected, the future is shaky for many at the business park branch.

However, not all staff at the business park are at risk as the review will not extend to those selling financial products.

Leader of the city council Cllr David Evans is not alarmed by the news.

He said: 'I think this needs to be seen in proportion in terms of the jobs still being created within this sector. In terms of how far it will affect Chester, it's a case of 'wait and see' because they haven't made clear how many, if any, jobs will be going.'

The council will be taking action to minimise the impact on the city, he said.

'We would hope that the job losses don't affect Chester and we will be trying to persuade the company that the future lies here but, it's a decision for the company.

'However, in the long term, our economic development strategy is looking at ways of ensuring that Chester's employment is not dependent on any one sector.'

Cllr Evans does not believe this is the thin end of the wedge.

'There is at present no evidence of this,' he said. 'Other financial centres are still expanding - Halifax and MBNA are building new premises and recruiting more people. It looks as though the financial services sector is still going to be a major sector in Chester.'

Marks and Spencer spokesperson Claire Foster said: 'The review forms a major part of Marks & Spencer's ongoing plan to accelerate business transformation and will cover structure and processes.

'As a result of preliminary indications, it is anticipated that around 500 jobs may be lost in the forthcoming financial year (2004/5). It is also anticipated that a further 500 may be lost in the following financial year as a result of technological enablement and outsourcing.'

The timing of the announcement was determined by the company's desperation to compete.

'We have got to a point where we need to do much more to accelerate the pace of change,' said Ms Foster. 'We have never made a secret of the fact that we need to be much more efficient.'

She added the lack of efficiency in parts of the company's four head offices was holding it back.

'The review will work alongside elements of the plan designed to enhance and extend our offer to more customers. These include initiatives such as: the roll-out of Simply Food stores; the launch of the &more credit and loyalty card; continuing developments in clothing; opening of Marks & Spencer Lifestore; increasing product choice in High Street stores and the store development programme,' said Ms Foster.

Once the review is complete it will be subject to a consultation process with employees, which, it is anticipated, will commence in May.