Sainsbury’s plans to axe 1,500 jobs in a mammoth £1billion cost-cutting drive.
The country’s second-largest supermarket is simplifying operations as it woos shoppers back from discount rivals.
The grocer, which also owns Argos, is looking to cut around 1,500 jobs across its warehouses, bakeries, call centres and human resources department
In the bleak update, Sainsbury’s said the plans are still subject to a 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 simplifying its operations as it ramps up a drive to woo shoppers back from discount rivals
It said it would slash costs by £1billion over three years so that it can lower prices.
Roberts has pledged to place ‘food back at the heart of Sainsbury’s’ by creating more space to sell groceries and less for clothes 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’ve been talking to teams about today are important to ensure we’re better set up to focus on the things that create a real impact for our customers, delivering good food for all of us and building a platform for growth.
‘I know today’s news is unsettling for affected colleagues and we will do everything we can to support them.’
It intends to close more stand-alone Argos stores and open more Argos click-and-collect points in supermarkets to trim costs.
And it will save money by replacing slow, outdated technology with modern systems, including more automated robots in its warehouses.
Last month the grocer was tight-lipped on potential job losses but supermarkets face rising wage bills, alongside other heightened 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, in Kantar data published this week.
Danni Hewson, AJ Bell head of financial analysis, said: ‘The announcement that it’s cutting 1,500 jobs is not surprising.
‘Earlier this month it said it was looking to cut another £1billion in costs as it doubled down on its ‘food first’ strategy. Companies in all sectors are having to make difficult choices to make sure they’re as competitive and productive as possible, digging into their USP and repositioning where necessary.’
Changes include replacing jobs at its Widnes contact centre by outsourcing the work to an existing third party and shaking up in-store bakeries.
The shares fell 1.6 per cent, or 4p, to 249.60p, adding to a 16.5 per cent slide this year so far.
The Body Shop announced a further 75 store closures last night, in another blow for the High Street.
It had already shut seven locations after falling into administration last month.
Some 489 staff will lose their jobs in the grim news.
