Economy

Sainsbury's cost-cutting will see 2000 jobs axed

Sainsbury's cost-cutting will see 2000 jobs axed”

Sainsbury's, the United Kingdom supermarket chain, is to cut 2,000 jobs in an effort to reduce costs by £500m as rising inflation and competition bite into profits.

The FTSE 100-listed company said the move, which was announced late on Tuesday (17 October), will save approximately £500m (€560m) and will affect both stores and back office positions.

The retailer is also restructuring its human resources functions at its banking arm and Argos, which could lead to a further 600 job losses, a Sainsbury's spokesman confirmed.

It said it would offer affected staff alternative roles wherever possible, or redundancy packages.

The shake-up by Sainsbury's, which took over Argos previous year, is part of a previously announced £500m efficiency drive aimed at allowing the company to invest more in its customer proposition. The 600 head office staff affected are based in Manchester, Coventry, Edinburgh and London.

Sainsbury's was considering cutting 1,000 jobs as part of a drive to save 500 million pounds ($659 million) in costs, media reports said in August.

Sainsbury's also owns Habitat, and employs almost 200,000 people in total.

"This has been a hard decision and we appreciate that this will be a tough time for those colleagues affected by the changes", a Sainsbury's spokeswoman said.

Britain's supermarket sector is facing one of the most challenging periods in its...

Competition from Aldi and Lidl has sparked a price war between supermarkets, carving into earnings at the Big Four - including Sainsbury, Tesco PLC (LON:TSCO), Asda and WM Morrison Supermarkets PLC (LON:MRW). According to figures released by Kantar Worldpanel, the German discount chains added £390m to their sales over the last three months, bringing their combined market share to 12%.



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