Tesco to axe 1,200 head office jobs

Pic: Tesco Store
Business reporter(wp):

Tesco plans to cut 1,200 jobs at its head office as part of a major cost-cutting drive.

The UK's biggest supermarket told staff on Wednesday morning about the cull, which amounts to a quarter of its workforce in Welwyn Garden City and Hatfield.

Tesco is implementing a turnaround plan that aims to reduce costs by £1.5bn.

The cuts come after the retailer said last week it would close a call centre in Cardiff at the cost of 1,200 roles.

Tesco said it was a "significant next step" in the reorganisation of the company.

"This new service model will simplify the way we organise ourselves, reduce duplication and cost but also, very importantly, allow us to invest in serving shoppers better," a spokesperson said.

Pauline Foulkes, national officer at shop workers' union Usdaw, said: "Tesco's head office staff are understandably very concerned that the company is proposing further large-scale job losses.

"Our priorities are to keep as many staff as possible in employment and to get the best possible deal for our members."

Shares in Tesco rose 1.6% to close at 171.7p, but have fallen almost 17% since the start of the year.

Tesco said earlier this year that 1,000 roles would go as it reduced the number of distribution centres.

It also announced a plan to replace 1,700 deputy managers at its Express convenience stores with 3,000 lower-paid "shift leaders".

Trading at Tesco has been improving under chief executive Dave Lewis and earlier this month it reported a 2.3% rise in UK like-for-like sales for the three months to 27 May.

The supermarket is undertaking a £3.7bn takeover of wholesaler and convenience store group Booker, which has drawn opposition from some shareholders.

Schroders and Artisan Partners have said that Tesco is paying too much for Booker, which owns the Premier, Budgens and Londis store brands. and has written to chairman John Allan about their concerns.

The Competition and Markets Authority has opened the first phase of its investigation into the deal, which will end in late July.