Tesco job cuts may continue after 1,700 roles axed

01-Mar-2017 - Last updated on 01-Mar-2017 at 14:49 GMT

Tesco's job cuts could continue throughout the year, an analyst warned (Flickr/Tesco PLC)

Tesco staff could face a second wave of job cuts this year, warned an analyst, after Britain’s biggest retailer axed 1,700 deputy manager roles.

“Tesco is reappraising its overall staffing strategy following the announcement of 1,000 job cuts in January,” said the Economist Intelligence Unit (EIU) retail analyst Jon Copestake. “In the background to all of this remains the ongoing acquisition of the Booker Group which, in itself is expected to result in further job losses.

‘Shedding jobs’

“With Tesco shedding jobs in a number of initiatives since [ceo] Dave Lewis’s appointment in July 2014, it seems that the ceo’s turnaround plan will result in more redundancies over the coming year.”

The claims came after Tesco announced plans to replace 1,700 deputy manager roles with 3,300 lower-paid shift leaders at its Express convenience stores – a net increase of 1,500 roles. Deputy managers will be offered alternative roles within the company, Tesco confirmed on Monday (February 27).

Tesco md of Convenience Tracey Clements said: “To help improve our service to customers in our Express stores we are aiming to have more of our colleagues on the shop floor, more often. To help achieve this we are creating more than 3,300 shift leader roles which, in turn, means we will no longer have deputy managers.

“We appreciate that these changes will impact our deputy manager colleagues, and will do everything we can to support them throughout this period.”

Likely to increase the supermarket’s costs

But, the analyst questioned Tesco’s restructuring plan, suggesting it might increase the supermarket’s employment costs.

Copestake said: “The impact and rationale of Tesco’s move here in unclear. Cutting deputy managers’ roles could be costly in the short term, as redundancies would need to be accommodated.

“The problematic nature of the restructure looks unlikely to win Tesco Express staff over. Nor does a spike in staffing costs of this kind align well with Dave Lewis’s plan to deliver higher margins.”

Since Lewis’s appointment in 2014, Tesco had slashed jobs in a number of schemes, Copestake said. The job cuts were unlikely to stop over the coming year, he added.

Meanwhile, last month industry insiders claimed that Tesco’s £3.7bn potential mega merger with Booker would lead to their suppliers losing out.