Unite is seeking urgent clarity after reports emerged on Sunday (January 27) that super market giant Tesco – the largest private sector employer in the UK – was considering plans to axe 15,000 jobs, a figure that has now been officially revised down to 9,000.
After a competitive Christmas trading period that left Tesco losing out to some customers who bought at least part of their festive fare from discounters such as Lidl and Aldi, the Mail on Sunday reported new plans forming part of Tesco’s cost-cutting goals.
One industry consultant confirmed to the Financial Times that in-store meat, fish and deli counters would be reviewed on a store-by-store basis.
“My understanding is that counters, if they are loss-making, will close down and it will be as brutal as just boarding them up,” the consultant told the FT.
Tesco later confirmed these reports this afternoon (January 28) but said it expected 9,000 jobs to be affected, not the 15,000 originally reported, and that it expected half of affected staff to be re-deployed in different roles. It refuted reports that any bakeries would be affected and confirmed that counter services would be cut — 90 stores will shut its counters, “with the remaining 700 trading with either a full or flexible counter offer for our customers”.
An email to staff leaked to the BBC following the initial reports apologised to workers for the media leaks, noting “we didn’t plan this and would never wish for changes to be communicated this way”.
The email went on to say, “These changes are still being finalised but as a result of this leak and speculation, we will bring forward communications to give more information as soon as we know.”
Unite, which has more than 2,000 members employed by Tesco including some 1,700 delivery drivers and about 350 members in food, has requested an urgent meeting with management to clarify any plans to cut jobs.
The union is recognised at four distribution centres with about 1,000 members who deliver to stores across the UK. The centres are at Belfast, Didcot in Oxfordshire, Doncaster and Thurrock in Essex.
The news of possible job losses are especially worrying against a background of ongoing cuts at Tesco after chief executive Dave Lewis took the helm of the supermarket giant in 2014. Since then Lewis sold the Harris & Hoole coffee shops, Dobbies garden centres and Blinkbox film service, all previously owned by Tesco. He also shut Tesco Direct, a website that connected third-party sellers with customers online.
Last year in January, Tesco slashed 1,700 jobs mostly in middle management and also axed its Cardiff call centre with the loss of 1,100 jobs.
Cuts over the last five years have occurred as Tesco, the UK’s largest supermarket has sought to recover from an accounting scandal that rocked the company in 2014. Lewis has pledged to deliver £1.5bn in cost savings by 2020 as well as an operating profit margin of 3.5 per cent.
But the pressure is on from German discount retailers Aldi and Lidl whose profit margins run at below 3 per cent, in effect undercutting UK competitors. If the competition watchdog approves a proposed merger of Sainsbury’s and Asda, Tesco would be under even more pressure and could lose its status as the UK’s largest grocer.
Unite national officer for retail distribution Adrian Jones said that the union’s top priority this week was to “arrange a meeting with Tesco’s management to get a clear picture of what the supermarket is planning, following media reports at the weekend that up to 15,000 jobs could be at risk”.
“This is a very worrying time for our members who deliver to Tesco stores across the UK,” he said. “While the reports centre on job losses in-store, such as at the bakeries and deli counters, we still need to know what this could mean for our members.”
“What is required very quickly from Tesco is clarity on its intentions going forward,” Jones added. “We will be giving our members, who are employed directly by Tesco, maximum support in the days and weeks ahead.”