Sainsbury’s is axing 2,000 jobs as the supermarket struggles to slash £500m of costs in the face of rising pressures from the return of food inflation and soaring wage bills.
The grocer, which paid £1.4bn for Argos last year, has launched a radical overhaul of its head office which will mean 1,400 payroll and human resources jobs will be scrapped. The retailer is also restructuring its banking division and human resources functions at Argos, which could lead to a further 600 job losses, a Sainsbury's spokesman confirmed.
In August, the Sunday Telegraph revealed that the supermarket had drawn up a staff reduction plan to meet its cost cutting target. Sainsbury’s employs 3,000 staff outside of its stores, including at its Holborn base in London. It also has a separate human resources centre in Manchester, an IT team in Walsgrave, Coventry, and a banking division in Edinburgh.
The staffing shake-up comes as the supermarket grapples with lower profits due to the price-war launched by discounters Aldi and Lidl whilst facing rising costs related to a weaker pound, the living wage and apprentice levy which is thought to have added tens of millions of pounds to its staffing bill.
Sainsbury’s has already cut 400 jobs in March while a further 4,000 employees were told they face major changes to their working hours in a shake-up of night shift work at 140 stores. Sainsbury’s follows Tesco in swinging the axe over its back-office staff. Britain’s biggest retailer unveiled 1,200 head office redundancies in June, just one week after it cut 1,100 jobs at a Cardiff call centre.
A Sainsbury’s spokesman said: “The UK grocery market is changing at a rapid pace and it’s crucial that we transform the way we operate to meet future challenges and continue to provide customers with best in class service.
“Following a comprehensive review, we are proposing some updates to our HR structures and systems, as well as changes to a number of other support roles, subject to consultation.”