British retail chain Tesco to cut 9,000 jobs amid fresh food store closures

UK – Tesco Plc, one of the largest retailers in England has confirmed that about 9,000 jobs are at risk following the decision to close several of its fresh food counters in several stores across the UK.

According to the Guardian, Tesco is closing about 90 of its stores and plans to lay off some of its employees at the head office.

Tesco, which has more than 300,000 UK employees, with more than 3,400 stores said it may redeploy up to half of the 9,000 directly employed Tesco staff into other customer service roles.

Several jobs are also expected to be lost at about 200 staff canteens run by out-sourced companies since 2017, as these will be replaced by self-service kitchen areas with vending machines.

The latest closures and job losses are geared towards cutting costs and increasing profitability in a market that is increasingly becoming constrained by low consumer spending.

Tesco is also battling competition from Aldi and Lidl who are wooing consumers with discounts.

According to Statista, Tesco and Sainsbury’s had the largest share of the grocer’s market in Great Britain but emergence of discounter stores such as Lidl and Aldi is cutting deeper into the cake with cheaper alternatives.

Corporate overhaul

To adapt to the challenging and competitive market, Tesco said it is moving to to a simpler and leaner structure at its head office.

Since he was named chief executive of Tesco’s UK and Irish business, Jason Tarry has spearheaded several corporate changes at the firm, including job cuts to bring it back to profitability.

The company is trying to recover from a huge pension deficit which it said had increased from US$4.19 million (£3.2 billion) to US$7.73 billion (£5.9 billion) due to the collapse in bond yields after Britain voted to leave the European Union.

Then, Davies Lewis said he targets to earn between 3.5p and 4p of operating profit for every £1 customers spend by 2020.

About a year ago, Tesco announced that it had decided to remove HR, compliance and customer service roles in cost-cutting bid.

This move put up to 1,700 jobs in 226 of Tesco’s largest stores at risk.

In 2017, the supermarket chain closed its operations in Cardiff, one of its two call centres which handle customer emails, social media inquiries and phone calls, threatening 1,100 job cuts.

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