Thousands of jobs at risk at Sainsbury’s

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Thousands of shop floor jobs are at risk as part of a major shake-up at Sainsbury’s.

The supermarket chain is changing the way it manages its stores across the UK and scrapping some management posts.

Sainsbury’s would not confirm the number of employees affected by the move but said it was “in the thousands”.

On Monday, the UK’s biggest supermarket chain, Tesco, announced it was cutting 1,700 shop floor management jobs.

Like the other major grocers, Sainsbury’s is trying to cut costs and simplify its plans to save £500m over the next three years.

Earlier this month, it confirmed it was “on track” to achieve £185m of cost savings this year, putting it ahead of target.

Sainsbury’s, which jostles for position as the UK’s second-biggest supermarket with Asda, has more than 1,400 stores in the UK.

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The posts will be replaced by fewer, but mostly better paid, new management roles in each store.

Employees have the choice of either applying for these new roles or accepting a more junior position if unsuccessful. Otherwise they face redundancy.

‘Difficult time’

Simon Roberts, retail and operations director of Sainsbury’s, said: “We’re proposing a store management structure that will deliver best in class leadership and, in many cases, will offer an improved reward package for new management roles.

“The proposals will introduce a more efficient and effective structure, designed to meet the challenges of today’s retail environment. They will deliver cost savings to be invested in our customer offer and in our colleagues as they continue to provide the very best service for our customers.

“Our intention is not to reduce overall headcount as a result of these proposals.

“I appreciate this will be a difficult time for those affected and we will fully support our people through these changes.”

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Rival Tesco has said it intends to cut 1,700 jobs from its branches and warehouses as part of its turnaround strategy. However, it also plans to create 900 jobs and said it would try to move staff affected by the cuts into the new roles.

Tesco’s UK chief executive Matt Davies said the changes were “necessary to ensure our business remains competitive and set up for the future”.

Tesco is aiming to make £1.5bn in cost savings over the three years to 2020.

Low-cost competition

Philip Dorrell, managing partner at Retail Remedy, said the “ongoing stresses” in the retail sector had been driven by a need to reduce costs in the face of shrinking profit margins.

“They are shrinking as the discounters have fuelled a need to be more competitive on price, at a time when the volumes that the retailers are selling reduce,” he added.

Discount retailers such as Aldi and Lidl were picking up much of the business lost by the mainstream supermarkets, he added.

As a result, grocers have had to cut costs – and labour is one of their biggest costs. “Therefore, the stage is set and the decline of the grocers’ workforce will continue,” he said.

The Unite union, which represents more than 12,000 members working for Sainsbury’s, said the jobs to be scrapped included team leader/store supervisor roles in all branches. There would also be “major changes” to the department manager and deputy manager structure, it added.

The union said it would seek “guarantees” that there would be no compulsory redundancies as a result of the restructuring.

“We appreciate that Sainsbury’s has a good record of redeployment of staff in these situations and we will be exploring every avenue to ensure the continuing employment for our members,” said Unite’s Bev Clarkson.