Tesco says 500 jobs to go in UK distribution network shake-up

LONDON, Jan 9 (Reuters) - Tesco (Frankfurt: 852647 - news) , Britain's biggest retailer, has proposed a shake-up of its distribution network that will result in the loss of a net 500 jobs, it said on Monday.

The plan will include reducing the number of Tesco's distribution centres from 25 to 23 in the UK, with centres at Welham Green, central England, and Chesterfield in northern England, closing.

All warehouse operations that are currently carried out by logistics companies Wincanton (LSE: WIN.L - news) and Deutsche Post (IOB: 0H3Q.IL - news) 's DHL , will also be brought in house, while management structures across the distribution network will be simplified.

A spokesman for Tesco said that while the changes will result in about 1,000 jobs being cut, new roles will create about 500 jobs at other sites. Tesco is Britain's largest private sector employer with over 310,000 workers.

In October Chief Executive Dave Lewis set out a plan that would see the retailer earn between 3.5 pence and 4 pence of operating profit for every 1 pound spent by shoppers, up from 2.18 pence currently, as sales rise and costs are cut through efficiencies in stores and in its distribution network.

Tesco is due to report on its Christmas trading performance on Thursday.

(Reporting by James Davey; Editing by Greg Mahlich)