British supermarket group Sainsbury’s said on Thursday it was proposing to reduce its headcount by over 3,000 roles as it seeks savings to counter a “particularly challenging cost environment.”
The UK’s second-largest supermarket group with 16% market share – trailing only Tesco – said a head office reorganisation would see a 20% reduction in senior management roles.
UK companies – particularly large employers – are facing increased costs this year after the new Labour government’s first budget in October hiked social security payments and the national minimum wage.
Sainsbury’s said in November that the rise in employer National Insurance contributions alone would cost an additional £140 million a year.
Seeking additional space in stores to sell more of its fresh food ranges, the retailer is also proposing to close its remaining patisserie, hot food and pizza counters, as well as its remaining 61 Sainsbury’s Cafés.
The restructuring of Sainsbury’s bakery, however, will include “new self-serve bread slicing.”
The group – which currently employs 148,000 people – said it would look to redeploy staff where it could.
CEO of Sainsbury’s Simon Roberts said, “We are facing into a particularly challenging cost environment which means we have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective.”
Shares in Sainsbury’s were down 0.3% – extending losses over the last year to 9.5%.
Sainsbury’s is approaching the end of the first year of Roberts’ latest strategy, which is seeking £1 billion of operating cost savings over three years.
Earlier this month, the group said it was on track to deliver full-year profit growth of around 7% after robust sales over the Christmas quarter offset weakness in general merchandise.
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