Tesco steps up bid to cut costs

TESCO ramped up its cost-cutting drive yesterday with plans to shed 1,200 head office jobs.

About a quarter of its staff in Welwyn Garden City and Hatfield in Hertfordshire face the axe, along with some roles at its technology and retail support centre in Bengaluru, India.

It comes only a week after Britain’s biggest supermarket group, led by chief executive Dave Lewis, pictured, said it would close a call centre in Cardiff, putting 1,100 jobs at risk.

The latest cull will affect roles in finance, property, marketing and buying once consultation has been completed over the summer.

A Tesco spokesman said: “Today we have shared with colleagues across Tesco changes that we plan to make to the way we operate our business. This is a significant next step to continue the turnaround of the business.

“This new service model will simplify the way we organise ourselves, reduce duplication and cost but also, very importantly, allow us to invest in serving shoppers better.

“We have made good progress so far in our turnaround but we have more to do.

“We will work with colleagues to support them as we go through this important transition.” An overhaul of the business under Lewis, who took charge in 2014, includes targeting operating-cost savings of £1.5billion over three years.

This year it has announced a shake-up of its UK distribution network with the loss of 1,000 jobs, as well as plans to replace 1,700 deputy managers with lower-paid “shift leaders” at its Express stores.

But last week it announced rates for hourly paid staff will increase by 10.5 per cent from £7.62 to £8.42.

Last night, Pauline Foulkes of shopworkers’ union Usdaw said: “Tesco’s head office staff are understandably very concerned that the company is proposing further large-scale job losses.

“We will now enter into consultation talks with the company over the coming weeks to look at the business case for their proposed restructuring.

“Our priorities are to keep as many staff as possible in employment.”

Tesco’s turnaround under Lewis delivered its first UK sales growth for seven years in the year to the end of February as operating profit rose by 30 per cent to £1.28billion.

Shares rose 2¾ p to 171¾p.