The Daily Telegraph - Business

Asda to scrap 5,000 roles in push for web dominance

Loss of back office staff to be partially offset by creation of 4,500 jobs to deal with internet orders

- By Laura Onita

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 coronaviru­s 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 abandoned 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 take up new manager roles.

Meanwhile, the company is ditching a number of 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 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 front line 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

‘The last 12 months have shown us that businesses have to be prepared to adapt quickly to change’

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 (£12bn) 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.

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