Sainsbury’s is looking to cut 500 head office jobs as part of a fightback led by the new chief executive, Mike Coupe, designed to shave hundreds of millions of pounds from its annual running costs.
In November, Coupe outlined plans to cut costs by £500m over three years as part of a strategic review that saw the grocer abandon 40 new supermarket projects and promise £150m of annual price cuts as it squares up to competition from discounters Aldi and Lidl.
The retailer, which has just reclaimed its slot as the UK’s second largest supermarket from Asda, is considered vulnerable as market leader Tesco presses ahead with a turnaround.
The Sainsbury’s announcement follows last week’s decision by Tesco’s new boss, Dave Lewis, to close its Cheshunt head office, where 3,000 staff are based, and cut the number of store managers. Asda and Morrisons have already shed thousands of staff by trimming management jobs in stores and behind the scenes.
“We have undertaken a thorough review of our central costs and structures,” said Sainsbury’s in a statement. “Each member of the operating board has looked at their division in great detail with the objective of reducing costs while at the same time making sure we remain focused on doing the right things for our customers.” Money saved on the back of job cuts would be used to “fund future investments in areas which really matter to customers”, it said.
The company intends to streamline its central divisions and bring the main supermarkets and convenience businesses together. “Some functions will be losing colleagues and others will be taking more on, with the expectation of around 500 fewer roles, spread across all divisions and grades in our store support centres,” the company added.
Workers based at its three major support centres in London, Coventry and Manchester will be affected by the change.
In a letter to colleagues, Coupe said: “We want to work through this period of uncertainty as quickly as possible while making sure we consult with colleagues who are affected by these changes. I recognise that these changes will be difficult for our colleagues and I can assure you the decision to make them was not taken lightly. However, I’m certain that we will be in a stronger position to deliver our new strategy and better equipped to win in these times of change as a result.”
Sainsbury’s began the formal consultation on Tuesday and said it expected the new structure to be in place by the start of the next financial year.
Steve Dresser, retail analyst at consultancy Grocery Insight, said the decision reflected the pressure Sainsbury’s was under. “They recently invested in price again so that means other areas need restructuring – particularly as grocery sales shift to the online channel,” he said.
