Sainsbury’s plans to cut 1,500 jobs in a massive £1bn cost-cutting drive.
The country’s second-largest supermarket is streamlining its operations as it lures shoppers away from its discount rivals.
The supermarket, which also owns Argos, is seeking to eliminate around 1,500 jobs in its warehouses, bakeries, call center and human resources department.
In the grim update, Sainsbury’s said the plans are still subject to consultation, leaving staff facing an uncertain future.
Last month, chief executive Simon Roberts announced a major overhaul of Sainsbury’s stores to win back shoppers from rivals Aldi and Lidl.
Cuts: Sainsbury’s is streamlining its operations as it steps up its campaign to woo shoppers from its discount rivals
He said he would cut costs by £1bn over three years to help lower prices.
Roberts has pledged to put “food back at the heart of Sainsbury’s” by creating more space for selling groceries and less for clothing and general merchandise.
Last night Roberts said: ‘As we move into the next phase of our strategy, we are making some difficult but necessary decisions.
‘The proposals we have been talking to the teams about today are important to ensure we are better prepared to focus on the things that create real impact for our customers, delivering good food for us all and building a platform for growth.
“I know today’s news is disturbing for affected colleagues and we will do everything we can to support them.”
It intends to close more standalone Argos stores and open more Argos click-and-collect points in supermarkets to cut costs.
And you’ll save money by replacing slow, outdated technology with modern systems, including more automated robots in your warehouses.
The grocer last month remained silent on potential job losses, but supermarkets face rising wages, along with other high costs of doing business, all while facing red-hot competition on prices.
Despite competition from discounters, Sainsbury’s increased its market share to 15.6 per cent from 15.2 per cent a year earlier, according to Kantar data published this week.
Danni Hewson, head of financial analysis at AJ Bell, said: ‘The announcement that it is to cut 1,500 jobs is not surprising.
‘Earlier this month it said it was looking to cut another £1bn in costs while doubling down on its ‘food first’ strategy. Companies across all sectors are having to make difficult decisions to ensure they are as competitive and productive as possible, deepening their USP and repositioning where necessary.
The changes include replacing jobs at its Widnes contact center by outsourcing work to an existing third party and rearranging in-store bakeries.
The shares fell 1.6 per cent, or 4 pence, to 249.60 pence, adding to a 16.5 per cent fall so far this year.
The Body Shop last night announced the closure of a further 75 stores, dealing another blow to the High Street.
It had already closed seven locations after falling into administration last month.
Some 489 employees will lose their jobs due to the grim news.
