Tesco managers "to be culled" in new round of job losses

16 February 2015 -

Thousands of staff face the axe at Tesco offices and in stores, as chief executive Dave Lewis looks to cut costs

Jermaine Haughton

Tesco’s store management teams could be the target of further job cuts, as chief executive Dave Lewis intensifies his bid to revive the ailing supermarket chain. According to a report by the Sunday Telegraph, middle management at the brand will be under particularly tight scrutiny as Lewis plans to slash up to 10,000 jobs – including around 6,000 spread between its Cheshunt head office and 43 stores that have been earmarked for closure.

Appointed to lead Tesco in September, Lewis looks set to continue his hands-on, austere approach by attempting to remove an entire layer of management from Tesco shops, the Telegraph claims. Personnel working in roles that sit between store-manager level and that of shop assistants are said to be in line for different positions – although details have yet to be released on whether they will receive the same pay or working hours.

With more than 310,000 staff across 3,330 stores, Tesco is the UK’s biggest private-sector employer. Lewis is reportedly aiming to reduce head-office costs by 30% and save £250 million per year in expenses, as the firm hunts for resources to fund price cuts and shore up its balance sheet.

If the job cuts come to fruition, they will only serve to emphasise the dire position that the chain has found itself in during the past 18 months. Following its £263m accounting scandal last year and the loss of market share to discount retailers Lidl and Aldi, the company has already warned that group trading profits in this financial year will not exceed £1.4 billion – down dramatically on the £3.3bn recorded for last year. Having sold off its foreign outlets, Lewis has refocused the retailer on its domestic performance, with analysts claiming Tesco is losing money in the UK.

Shore Capital analyst Clive Black told the Telegraph that Lewis is trying to “simplify” Tesco, and that the plans of so-called “Drastic Dave” plans are similar to those he implemented during his top-to-toe revamp of Unilever almost a decade ago.

In the New Year, Tesco began a staff consultation, with head office employees offered voluntary redundancy. The full allocation of the reported new job cuts will depend on the success of that consultation process, and how willing store workers are to move into new positions and working structures.

Tesco is not alone in its mission to shed staff. Poor sales performance forced fellow Big Four supermarket Asda to announce 1,360 redundancies last year after shaking up its management structure, while Morrisons cut 2,600 jobs. However, Tesco is also awaiting a new chairman to work with Lewis, after the accounting scandal forced previous chair Sir Richard Broadbent to step down. Barratt Developments’ John Allan is the tipsters’ favourite to take over the position.

“Drastic Dave” certainly seems to have strong ideas of what works. For more thoughts on essential traits for successful leadership, sign up to this forthcoming CMI seminar.

Image of Tesco sign courtesy of 1,000 Words / Shutterstock.