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Sainsbury's to cut 2,000 jobs in cost-saving drive | |
(35 minutes later) | |
Sainsbury's has said it will cut up to 2,000 jobs from its human resources staff as part of plans to reduce costs. | |
The UK's second biggest supermarket chain says the "difficult decision" will affect roles in stores, as well as in the company's central offices. | |
It plans to make 1,400 payroll and HR clerks redundant and other changes could see another 600 posts removed. | It plans to make 1,400 payroll and HR clerks redundant and other changes could see another 600 posts removed. |
Sainsbury's is looking to save £500m amid fierce competition from discounters and rising food costs. | |
The majority of the headcount losses will be from within its supermarket stores. | |
The 600 roles on which the group is consulting are predominantly HR roles across the supermarket chain, its newly acquired Argos chain, as well as Sainsbury's bank. | The 600 roles on which the group is consulting are predominantly HR roles across the supermarket chain, its newly acquired Argos chain, as well as Sainsbury's bank. |
Sainsbury's also owns Habitat, and employs nearly 200,000 people in total. | Sainsbury's also owns Habitat, and employs nearly 200,000 people in total. |
It said it would offer affected staff alternative roles wherever possible, or redundancy packages. | It said it would offer affected staff alternative roles wherever possible, or redundancy packages. |
Discounts and competition | Discounts and competition |
Sainsbury's said last November it aimed to reduce its running costs by £500m within three years. Earlier this year, in March, it said it would cut 400 jobs. | |
Its biggest rival Tesco is also shrinking its headcount. Tesco said in June that it would cut 1,200 jobs from its head office, just days after revealing that more than a thousand jobs were going at its Cardiff call centre. | |
All the big established grocers are juggling rising costs and increased competition from the discounters. | All the big established grocers are juggling rising costs and increased competition from the discounters. |
Analysis: Emma Simpson, business correspondent | Analysis: Emma Simpson, business correspondent |
It's hard to keep pace with the scale of cost cutting and restructuring underway at Britain's biggest grocers. | |
They're facing a perfect storm of rising costs and changing shopping habits. | |
And with the competition still cut throat from the discounters, they can't afford to recover those costs by putting up prices too much for the consumer. | |
Sainsbury's and its other main rivals are all trying to reduce operating costs and simplify their businesses to make them more efficient. It's a big, structural, shift and painful for all those affected. | |
Figures released earlier on Tuesday by Kantar Worldpanel showed Lidl and Aldi adding sales in the double digits, while established giants were growing sales by around 2%. | Figures released earlier on Tuesday by Kantar Worldpanel showed Lidl and Aldi adding sales in the double digits, while established giants were growing sales by around 2%. |
Even so, Tesco has 28% of the UK's grocery market, while Sainsbury has just short of 16%. | Even so, Tesco has 28% of the UK's grocery market, while Sainsbury has just short of 16%. |
Sainsbury's latest figures, released in July, were its best in four years, with same store sales up by 2.3%. | |
A Sainsbury's spokesman said the UK grocery market was "changing at a rapid pace" and meant the firm needed to "transform the way we operate". | A Sainsbury's spokesman said the UK grocery market was "changing at a rapid pace" and meant the firm needed to "transform the way we operate". |
He said the supermarket was proposing updates to its HR systems and changes to a number of other support roles as part of a consultation. | He said the supermarket was proposing updates to its HR systems and changes to a number of other support roles as part of a consultation. |
"This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected by the changes. We will support them in any way we can," he added. | "This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected by the changes. We will support them in any way we can," he added. |