Two thousand jobs are to be axed at Sainsbury’s amid cost cutting measures as rising inflation and the ongoing grocery price war hit its margins.
In an effort to save £500 million, 1400 store-based staff will be made redundant, while a further 600 staff in Manchester, London, Coventry and Edinburgh in back office roles will be cut, according to The Times.
The new measures come amid widespread job losses across the grocery sector, as the Big 4 struggle to compete with Aldi and Lidl.
Yesterday Kantar Worldpanel’s market share figures revealed that although sales were up across the Big 4, they all lost market share to the German discounters.
Sainsbury’s is reportedly moving to a centralised HR model during the three-year overhaul, which is due to be completed in March next year. HR roles tasks like payroll processing will no longer be done in-store.
Despite nearing the end of its initial overhaul plan, chief executive Mike Coupe has announced that a further £500 million cost saving plan will be initiated straight away.
“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,” a Sainsbury’s spokesman said.
“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.
“This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected by the changes.”
The cuts follow 400 redundancies made in March this year, alongside changes to 4000 staff’s hours as Sainsbury’s scrapped night shifts in 140 stores.
According to Kantar, Sainsbury’s saw sales jump 1.9 per cent in the 12 weeks to October 8, while its market share dropped 0.2 per cent to 15.8 per cent.
Throughout the period sales made through price-cut deals were down significantly from 40 per cent to 35 per cent.
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