Asda has pushed the button on proposals to “radically” restructure its store management teams that are likely to result in 1,360 redundancies.
An Asda spokesman told Retail Week the changes reflect the structural changes in the grocery market including the shift to online.
However, while 4,100 roles are affected as part of the restructure, Asda is creating 5,670 roles - up on the 5,000 positions it had initially expected to create when it floated the plans in May. The positions will comprise 4,008 section lead roles and 1,662 section manager roles.
He said that some of the 1,360 people expected to take redundancy will do so because they have not met the expected criteria for the new positions, which include senior roles managing ecommerce in stores. Asda had initially forecast that up to 2,600 redundancies could be made.
Asda chief executive Andy Clarke said: “As much as it is my job, and privilege, to be chief executive of this business and to do what is right for Asda as a whole, this is one of the most difficult decisions I’ve had to make. Whilst I genuinely believe that it is the right decision for the future of Asda, knowing that it will result in valued colleagues leaving us is not easy.
“Every supermarket must adapt to the intense changes in UK retailing or they will get left behind. We spotted this nearly two years ago, responding with a new strategy and taking time to thoroughly examine our structures, test scenarios, talk to our colleagues and adjust our proposals accordingly. This thorough process has helped us to reach this difficult decision today.”
Asda’s spokesman said: “The way we manage our stores will be radically different from October. Stores have to be more flexible to deal with the pace of change. We’re upweighting the role of ecomm in-store, giving it a more senior level of management.”
The changes will also put more colleagues on the shop floor and remove back office administration tasks, he said.
He added that managing online orders has become more complex in recent years with the rise in popularity of services such as click and collect. Asda has invested heavily in multichannel and operates 300 click-and-collect points, including an innovative pilot at London Underground stations.
The restructure will also enable Asda to make significant cost savings. The spokesman said an exact figure will be reported at its second quarter update next month, but it will run into millions. “We are making a cost saving, it is a big number,” said the spokesman.
Asda’s executive team met last night, when they opted to implement the proposals, first revealed by Retail-Week.com in May. Clarke and chief operating officer Mark Ibbotson have already spoken to elected reps and briefed store managers.
“That puts us in the position market share-wise that we’ve not been in since 2009,” said the spokesman. “There are green shoots for us. But we still need to change. The market is still shifting.”
In May Ibbotson said: “We haven’t updated our structure for five to six years. We’ve got to have a business with an eye on the future.”