Cost-cutting at Asda supermarket chain puts 2,832 jobs at risk

More than 2,800 Asda workers face the threat of redundancy as Britain’s third-largest supermarket chain looks to cut costs.

Asda has begun a consultation with 2,832 employees who work in back office roles in its supermarkets, the Guardian has learned.

The retailer, which forced workers to sign up to a controversial, more flexible employment contract last year, has told staff working in administrative, cash office and personnel roles that their jobs are at risk. The consultation process is understood to have begun on Thursday.

Gary Carter, a national officer at the GMB trade union, said: “Off the back of the dispute we had last year about pay – and coming shortly after Christmas – this is quite devastating news for Asda staff. It has been one round of redundancies after another.”

Asda is at a crossroads after last year’s £7bn merger with Sainsbury’s was blocked by Britain’s competition watchdog. Its American owner, Walmart, has since said that it was “seriously considering” seeking a stock market listing for the business, although preparations for a flotation could “take years”, according to Judith McKenna, the chief executive of Walmart International.

The cost-cutting comes after a tough Christmas for the big four supermarkets Tesco, Sainsbury’s, Asda and Morrisons, which all lost sales to the fast growing discounters Aldi and Lidl. Amid a welter of price cuts and promotions, the grocery industry recorded its slowest growth in at least four years at just 0.2% in the 12 weeks to 29 December.

Asda is proposing halving the back-office workload in each of its 639 stores. With the 45-day consultation period now under way it is anticipated that redundancies will begin in April. It is not clear how many of the 2,832 jobs singled for consultation will be eliminated, but the retailer is seeking “significant hours reductions” in the affected departments, according to the GMB. There have been several similar job cutting exercises in recent years.

“The way in which we operate our store-based back office has evolved over recent years to adapt to changing customer behaviour, such as an increase in card payments over cash,” said Asda in a statement. “As a result, we are proposing some changes to increase efficiencies and simplify ways of working across administration, compliance and cash office. We have opened a collective consultation with those colleagues impacted and their representatives and will have conversations about any potential change with our colleagues first.”

In a separate shake-up, Asda is also closing 400 of its traditional meat and fish counters (Tesco pushed through a similar rationalisation last year) and is replacing them with “Food for Now” areas selling piri piri chicken, sushi and pies.

Asda has already created Food for Now areas in 13 stores and intends to open 150 by the end of 2020. The lineup will vary from store to store with a food court-style dining experience, with Sushi Daily and Subway concessions opening recently in Edinburgh. Asda has also teamed up with Just Eat to launch a pizza delivery service from 50 stores which will also be expanded.

There are no job losses linked to the counter closures – 9,000 people were affected by similar changes in Tesco’s stores – because the contract change forced workers to accept variable shifts between 8am and 10pm and to switch between departments as required. This means counter staff can be moved to other roles with recruitment freezes now operating in stores where changes are being made.

Elizabeth Ruddiman, the senior manager of Food for Now, said recent store trials had demonstrated demand for an offer “better aligned with our customers’ lifestyles”. “The popularity of our sushi concessions and international cuisine shows there has been a shift in customer behaviour and there is a need to provide a greater choice in our stores,” she said.

Asda said there would be no loss of choice for shoppers as a result of fresh foods counters disappearing, as it had introduced more pre-packed meat and fish options, which were increasingly popular with customers.

Last year’s contract change was a major flashpoint for Asda, with the company telling staff if they did not sign up to the new contract they would have to leave the business – a situation that put it at loggerheads with the GMB. In the end fewer than 250 workers did not sign up to the deal which offered a higher hourly rate but involved sacrificing paid breaks and extra cash for working most bank holidays and some night-shift hours.

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