Yahoo Finance Sainsbury's to cut hundreds of management jobs
Sainsbury’s is to cut hundreds of jobs in management as it presses on with the integration of Argos, which it bought for £1.4bn in 2016.
In a letter to staff, the supermarket chain’s chief executive, Mike Coupe, said the company’s leadership team had already been reduced by 20% since the beginning of the financial year in March 2019.
Coupe said the structural reorganisation would ultimately lead to hundreds of job cuts, part of a plan to save £500m in costs by 2024. He told staff that Sainsbury’s was already “uniquely placed to deliver a seamless shopping experience and to help our customers live well for less”.
He said: “But we have to adapt to continue to meet the needs of our customers now and in the future and, while change can be hard, it’s also necessary.
“We have a clear purpose and a strong and compelling set of priorities that will support us to deliver for our customers.
“We already have a sense of momentum across the business and can accelerate this by streamlining our structure and responding to customer needs more quickly. Truly integrating our business also unlocks efficiencies that we can reinvest in the things that matter most to our customers.
“I’m confident that the changes we’ve announced today will move us forward and deliver a joined-up customer experience across our brands. Thank you for your continued dedication to doing a great job for our customers as we continue with our integration.”
While Sainsbury’s ultimately expects the Argos merger to result in cost cuts, its last set of full-year results showed that the early stages of integration has weighed on profits.
The £200m cost of closing 15 supermarkets and dozens of Argos stores all but wiped out profits, according to an update issued in November.
The UK’s second largest grocer said pre-tax profits dived more than 90% to £9m in the six months to 21 September after the one-off property write-down, compared with £107m in the same period a year before.
It also spent £25m in redundancy costs related to reorganising store management and closing an Argos delivery depot as the supermarket steps up integration with the catalogue shop.
Sainsbury’s has also embarked on a failed merger with the supermarket rival Asda since the Argos takeover.
In 2018, Coupe was caught on camera singing “We’re in the money” before an interview about the deal, only to see it blocked by competition authorities a year later.
