Tesco has confirmed that up to 9,000 staff jobs are at risk as it closes fresh food counters in about 90 of its stores and makes cuts at its head office.
The retailer, which has more than 300,000 UK employees and more than 3,400 stores, said it hoped to redeploy up to half of the 9,000 directly employed Tesco staff into other customer service roles.
The Guardian understands that hundreds more jobs are at risk from the closure of about 200 staff canteens, which have been run by outsourcing companies since 2017. Tesco said it could not confirm how many outsourced jobs would be affected.
Jason Tarry, the chief executive of Tesco’s UK and Irish business, said the market remained challenging and Tesco needed to adapt to remain competitive: “We’re making changes to our UK stores and head office to simplify what we do and how we do it, so we’re better able to meet the needs of our customers.”
He said shoppers had less time to spend and so were using fresh food counters less frequently. Fish, meat and other fresh food counters will close in about 90 stores but remain trading in 700 more, some with reduced hours. Tesco said it did not plan any significant changes to its in-store bakeries this year.
Staff canteens, which provide hot food in about a third of Tesco stores, are to replaced by self-service kitchen areas with vending machines.
The company, Britain’s biggest retailer, said it was also moving to a simpler and leaner structure at its head office.
Pauline Foulkes, the national officer for the Usdaw union, which represents thousands of Tesco staff, said: “Staff at Tesco are shocked and dismayed by the scale of yet another round of potential job losses, which clearly demonstrates the pressure retailers are under in the current very difficult and uncertain economic climate, as the cost-cutting continues.
“This is devastating news for staff, who have played a crucial role in Tesco’s turnaround project, contributing to 12 successive quarters of growth, solid Christmas trading and over £1bn of profit.”
The cuts are part of a plan to slash £1.5bn from Tesco’s cost base as the chief executive, Dave Lewis, tries to rebuild profits, which have never recovered from an accounting scandal in 2014.
The company is also trying to simplify and cut costs to help it fight back against the discounters Aldi and Lidl, which are taking an increasing share of the market.
Bruno Monteyne, an analyst at Bernstein Research, suggested that the latest cuts were likely to save Tesco up to £170m annually and would have been planned and tested for at least a year.
“This not a knee-jerk reaction to the ‘competitive and challenging market’. The market is obviously tough but we think this language is as much about reminding staff and unions why Tesco had to embark on this four-year restructuring programme rather than indicating that things got worse recently,” he said in a note.
Since Lewis took over five years ago, he has cut thousands of jobs. Last winter, 1,700 employees were affected when Tesco stripped out a layer of middle management. It has also closed its Cardiff call centre, with the loss of 1,100 jobs.
All the major supermarkets have made job cuts in recent years as they have tried to reduce costs and lower prices for their shoppers while enduring heavy competition and rises in business rates, the legal minimum wage and some food costs.
The retail sector as a whole shed 70,000 jobs in the final three months of 2018, according to recent data published by the British Retail Consortium trade body. It warned that nearly a third of retail businesses planned to shed staff in the coming months.
