Asda restructuring to cut 1,360 jobs

Asda Image copyright PA
Image caption Asda has almost 600 stores across the UK

Asda has announced a shake-up of its management structure, which is likely to result in 1,360 redundancies.

The supermarket chain first outlined the proposals in May, and had initially forecast that up to 2,600 people would lose their jobs.

After a 45-day official consultation with staff, Asda confirmed that although it is creating 5,670 new roles the majority will be on a lower pay grade.

The move affects 4,100 managers.

The retailer, which has 578 stores across the country, says 1,360 people are expected to take redundancy, as staff choose to leave or do not meet the overall selection criteria for the new roles.

Asda currently employs over 170,000 people across the UK.

BBC business correspondent Emma Simpson writes:

All the big supermarkets are grappling with the rise of online shopping and changing shopping habits.

These are big structural shifts for the industry and retailers are having to adapt.

Asda has arguably moved faster than its main rivals. Last November it said it would invest a billion pounds to improve its stores and cut prices - before Tesco and Morrisons launched their price cuts.

The way it manages its stores is now going to radically change. For instance, Asda says the e-commerce side of the business has become much more complicated than it used to be, driven by the rise of click-and-collect, and this requires new managerial roles.

But, this is not just about strategy, it's also about cost cutting. Asda will likely make multi million pound savings as a result of the restructuring. Many existing staff will be let go.

Just last month, Morrisons said it would be cutting more than two and a half thousand jobs as part of moves to simplify its management team. Question is, will Tesco and Sainsbury's eventually follow suit?

Commenting on the new measures, Asda chief executive, Andy Clarke, said: "As much as it is my job, and privilege, to be CEO of this business and to do what is right for Asda as a whole, this is one of the most difficult decisions I've had to make.

"Whilst I genuinely believe that it is the right decision for the future of Asda, knowing that it will result in valued colleagues leaving us is not easy."

Over the coming weeks, managers affected by the changes across Asda stores will either begin training for their new jobs or take a redundancy package.

In June, one of Asda's rivals, Morrisons, said it was cutting more than 2,500 jobs as part of moves to simplify the management structure in its stores.

The company, which is based in Bradford, had reported annual losses of £176m, and said it wanted to modernise the way its supermarkets are managed to improve customer service and win back shoppers.

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