Yahoo Finance Asda’s billionaire bosses knew payroll switch would spark crisis – but went ahead regardless
Asda’s billionaire bosses forged ahead with a botched IT transition despite being warned in advance that thousands of workers would be paid incorrectly, The Telegraph can reveal.
Senior figures were told in advance of the problems underlying the changeover, which has impacted 30,000 employees and left some hundreds of pounds out of pocket.
The IT changeover is being overseen by the company’s billionaire co-owner Mohsin Issa, who has made clear it is one of his top priorities.
The crisis has led to calls from unions for Mr Issa to apologise. The revelation that he was warned about issues with payroll ahead of the transition are likely to only heighten pressure on the billionaire tycoon.
Problems relating to the payroll first arose last month. Asda has been unable to fix the issue since.
The ongoing payroll crisis at Britain’s third-largest supermarket led to further problems on payday last week, with internal systems inundated with complaints. Some employees were underpaid while others were overpaid.
Financial pressures led to store managers making £200 petty cash payments to affected staff last month, although it is understood this will not be the case this time around.
A senior employee at Asda said there had been “thousands and thousands of complaints”, adding: “We knew it was going to happen.”
In response to the latest issues regarding pay, a GMB spokesman said: “GMB reps have been meeting with Asda management consistently over this issue.
“We have asked for simple things to protect colleagues – for example, adequate levels of petty cash to cover any underpayments. We have also asked for a public apology from Mohsin Issa who had overseen what is fast becoming a shambles.
“Asda knew how problematic these pay rounds were going to be but continued regardless – Mohsin Issa must bear responsibility for the stress and anguish this is causing hard-working Asda colleagues.”
An Asda spokesman said: “The first payroll run with a large-scale systems migration rarely passes without any issues in any industry.
“For Asda colleagues, we unreservedly apologise to those impacted and continue to work with colleague representatives, including our unions, to rectify any outstanding issues – as a top priority.
“For the April payroll, Asda can confirm that the number of payroll queries was significantly reduced.”
The latest payroll debacle has fuelled tensions internally, coming against a backdrop of cost-cutting across the business driven by a growing debt finance bill. Asda is struggling under the weight of billions of pounds of debt and battling falling market share.
Details of the challenges facing Asda come just days after it emerged Zuber Issa, Mohsin’s brother, was nearing a deal to sell his 22.5pc stake in the retailer.
The proposed sale of his shares to TDR Capital will hand majority control of the business to the private equity giant, which helped to finance the Issa brothers’ 2021 takeover of the supermarket.
The deal would increase TDR’s ownership of Asda to around two-thirds.
