Cost Savings Drive Tesco to Axe 9,000 Jobs in UK

Britain’s largest retailer Tesco is likely to chop 9,000 jobs in its United Kingdom stores and head office, following the company’s decision to simplify operations and attain targeted cost savings. In a move to alleviate the impact of its latest move, the company is likely to give half of its staff alternative roles across the business.

Tesco, with a staff of more than 300,000, said the key chain it is going to bring in its stores would be to its fresh meat, delicatessen, and fish counters. The company is expected to shut counters in roughly 90 stores, with the rest 700 trading with something called ‘a full or flexible counter’.

Tesco’s operational moves highly differ from rivals, including No. 4 player Morrisons, which continue to focus on its team of well-trained fishmongers, butchers, and other specialists preparing food in -store.

Contrary to the media reports, Tesco isn’t planning to introduce any changes in its in-store bakeries in 2019, however, it acknowledged that the company now needs fewer staff for merchandising, stock control, and at its head office.

Those working under third party caterers serving hot meals in Tesco staff rooms would also lose jobs, as a result of the retailer’s cross cutting drive.

All the four leading food retailers in the Britain, including No. 2 Sainsbury’s and No. 3 Asda who are looking for a merger, continue to chase efficiency savings to sponsor price cuts in order to better compete with discounters Lidl and Aldi, who are still gobbling a major market share.

In October 2016, Tesco came up with a strategy to chop operating expenses by 1.5 billion pounds over a time period of three years by optimizing efficiencies in its stores and distribution network, and from procurement savings.

Tesco is focusing on the cost savings in order to achieve the company’s target of a group operating margin of 3.5% to 4% by the financial year 2019-20, up from 2.9% in 2017-18.

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Supriya Bhor

About the Author: Supriya Bhor

Having Knack for precision, I take a meticulous approach to find informative pieces of news across industries such as technology, ICT, healthcare and F&B to name a few. Follow me to catch the latest trend.

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