Up to 5,000 Asda jobs at risk in major restructuring
Asda is to slash thousands of back office jobs and focus on conquering the online grocery market as it prepares for new ownership under the billionaire Issa brothers.
The chain will axe up to 5,000 staff as part of a drive to simplify the management structure in stores and bolster its online offering. Bosses are also seeking to hire 4,500 staff to pick internet orders.
Sources said the decision is not related to its new owners, who bought the chain from Walmart in a £6.8bn deal in October, but is instead driven by changing shopping habits after customers embraced the internet when Covid struck.
Separately, chemist chain Boots said it could cut up to 300 support office roles at its headquarters after it slashed 4,000 jobs in July.
Home deliveries have boomed at Asda and rivals since March last year as locked down customers abandon physical stores. The grocer has increased its online capacity by 90pc to 850,000 weekly slots and plans to get to one million by the end of the year.
To support the growth, more employees are required to pick products off the shelves as well as taking up new manager roles.
Meanwhile the company is ditching several back office positions, with the aim of several workers' tasks being carried out by a single employee using more modern systems in future. Asda is also closing Dartford and Heston home shopping centres, accounting for 800 of the 5,000 cuts.
It has launched a formal consultation and the company hopes to move as many staff as possible into different jobs, with redundancy only considered as a final option. Asda has 145,000 employees.
Roger Burnley, chief executive, said: “Our priority is to serve customers in the way they want to shop with us. The last 12 months have shown us that businesses have to be prepared to adapt quickly to change. We have to evolve our business to meet these demands and ensure our business is strong and sustainable for the long term.”
Mr Burnley said the consultation is likely to be unsettling for employees. He added: “Our absolute aim is to ensure as many colleagues as possible stay with us as well as creating the opportunity to welcome new people to our business.”
Roger Jenkins, of the GMB union, said: “Asda workers have had a torrid two years. The failed Sainsbury’s takeover, 12 months working on the pandemic frontline and now the uncertainty of a new takeover ... this is the last thing they need.”
Mohsin and Zuber Issa agreed a deal to buy Asda last year. They also own EG Group, one of the world's largest forecourt and convenience store operators.
The pair are merging Asda’s petrol stations with their forecourt empire in a £750m deal as part of their takeover of the supermarket.
The Issas said they planned to raise a further £1.2bn to support this acquisition as well as another deal in Germany. They borrowed £3.5bn to support the broader transaction with Walmart.
Annual sales at EG fell to $16.9bn from $22.1bn for the year to December, mostly due to the impact of the pandemic on road traffic.
Underlying profits were up by 10pc on a like-for-like basis to $934m, according to unaudited accounts. Net debt was $8.9bn.
EG warned that its audited accounts will be filed late because new auditor KPMG needs to set up a team capable of dealing with the complexity of the business.
The Issas have bought stations across the world including hundreds of sites in Australia and the US. Their firm is said to have clashed with former auditors at Deloitte over corporate governance and a lack of independent directors.
It has since appointed a string of non-executive directors, including former Land Securities chairman Dame Alison Carnwath; former BP executive John Carey; and Lord Rose as chairman, who will step down from the same role at Ocado.
