Tesco has confirmed up to 9,000 jobs are at risk at its stores and offices across the country as it broke its silence on speculation over cuts.
The supermarket giant, Britain’s biggest private sector employer, said up to half of staff affected might be redeployed to other roles, suggesting thousands are likely to be layed off in a major cost-cutting drive.
Shares in Tesco (TSCO.L) dropped by nearly 1.4% to 221p on Monday as it confirmed around 90 large stores would lose their fish, meat or deli counters, with the remaining 700 counters elsewhere likely to have either the same or reduced hours. The price recovered slightly in later trading hours.
Jason Tarry, CEO of Tesco UK & Ireland, said in a statement: “In our four years of turnaround we’ve made good progress, but the market is challenging and we need to continually adapt to remain competitive and respond to how customers want to shop.
“We’re making changes to our UK stores and head office to simplify what we do and how we do it, so we’re better able to meet the needs of our customers. This will impact some of our colleagues and our commitment is to minimise this as much as possible and support our colleagues throughout.”
The company also said on its website that it did not plan to make “any significant changes to its bakeries this year”, as suggested in some media reports earlier.
It said: “Overall, we estimate that up to 9,000 Tesco colleague roles could be impacted, however, our expectation is that up to half of these colleagues could be redeployed to other customer-facing roles.
“Media speculation over the weekend was premature and we have accelerated our communications to colleagues in order to reduce the significant uncertainty created by incorrect information.”
The proposed changes include:
- Reducing the number of times store layouts are changed, reducing confusion for customers and workloads for staff.
- A “simpler way” of doing store routines and how stock is managed, reducing the number of staff hours needed.
- A “simpler leaner structure” at the head office, which suggests fewer staff will be kept on.
- Staff canteens in a third of stores will be replaced by “self-service colleague kitchen areas”, with outsourced catering staff at risk following a trial in some branches and reduced demand.
Pauline Foulkes, an official at the main Tesco staff union Usdaw, condemned the plans and said the union would go into consultation talks with the firm.
She said: “Staff at Tesco are shocked and dismayed by the scale of yet another round of potential job losses, which clearly demonstrates the pressure retailers are under in the current very difficult and uncertain economic climate, as the cost cutting continues.
“This is devastating news for staff, who have played a crucial role in Tesco’s turnaround project, contributing to 12 successive quarters of growth, solid Christmas trading and over a billion pounds of profit.”
Several people who said they worked for Tesco, which has more than 300,000 staff, wrote on Twitter of their alarm and anger when reports appeared in the media on Sunday.
One said this morning: “Tesco have excelled themselves with their staff communication. I’m a Tesco employee, I find out about job cuts from the news … and not even an email from Tesco to help reassure staff after the info leak. Gold star, Tesco.”
Tesco’s latest statement describes the measures as an attempt to “simplify our business” in a competitive and challenging market, and responded to anger over media reports by saying the firm “communicate changes to colleagues first.”
It says customers today have less time to shop and are using its counters less.
The major cuts come as Tesco faces huge competition from German discount grocers Aldi and Lidl, which have cut into the market share of leading supermarkets in recent years.
Tesco has just celebrated its best Christmas sales since 2009. But like the rest of the retail sector and other bellwether UK retailers, it is under enormous pressure to retain market share.