Asda interim boss Stuart Rose has announced major jobs cuts and a restructure affecting thousands of head office staff, which will see management office roles slashed by 475, with surviving staff ordered to return to the office three days a week.
The Grocer has learned Asda cancelled all meetings with suppliers that had been scheduled for today as it informs staff of the changes.
The move comes as the former M&S boss Lord Rose attempts to lead a turnaround strategy after owner Mohsin Issa stepped back from day to day control of the business in September.
A note to staff yesterday from Rose and Rob Hattrell, head of digital at co-owner TDR Capital, said Asda would be moving to a new, less top-heavy management structure, which would enable investment to be focused on stores.
The changes are understood to apply to more than 5,000 head office workers across three different locations in Leeds and Leicester.
It’s understood staff have also been given a “return to office mandate”, which will see staff work from head office three days week from 1 January.
Asda said the shake up would involve “fewer, bigger roles” with “simplified ways of working” using the new technology being rolled out by the company as part of its uncoupling from former parent Walmart, known as the Future Programme
In the note Rose and Hattrell said they were making attendance compulsory at the Asda House and Britannia House sites in Leeds and the George House site in Leicester.
“Asda has seen much change over the last three years as we seek to build a better business,” they said.
“The rollout of Asda Express, the creation of Asda Rewards and the investment in the Future Programme are key examples. We have to recognise that the market is challenging and the competition isn’t standing still.
“We have rightly taken the decision to invest in our stores, focus on improved availability and enhanced customer experience, alongside a stronger trade plan. We must now deliver a more flexible and fast-moving home office structure to support those priorities.
“As part of this process we are redefining roles and accountabilities to remove duplication and simplify structures.”
In July Asda announced it was pumping £30m into improving stores in a “reset” of the businesses, after admitting it had to act to improve service and store standards.
But the decision to axe staff at head office will be seen as the latest evidence that it is struggling to turn the corner.
Announcing the moves to suppliers yesterday, Asda chief commercial officer Kris Comerford said: “Sadly, as a result, some colleagues will be leaving the business this week, whilst others will be considering new roles and responsibilities.
“We will be speaking individually with all impacted colleagues, who will receive the appropriate support during this transition.”
Asda, which will reveal its Q3 result on Friday, has not shed light on the full number of staff impacted by the changes, although it has already faced a long battle with the GMB union over pay and conditions.
It said staff were being informed over the course of the next few days, with many believed to have already been told their jobs had been removed.
Lord Rose added: ”This difficult decision has not been taken lightly and we recognise it may be unsettling, but we believe it is necessary to secure the long-term growth of our business.”
GMB national officer Nadine Houghton described the move as ”morally repugnant” and confirmed that the union is seeking clarification that Asda followed the correct legal process for mass redundancies.
“Handing hundreds of committed workers a brown envelope and showing them the door is a morally repugnant way to treat your workforce,” she said, adding that the cost-cutting drive has ”come at the hands of TDR Capital who are desperately trying to cut costs as Asda’s market share continues to decline”.
“The cost of paying down the debt loaded on to Asda continues to be a block on the genuine measures the business needs to enact to thrive,” she continued.
”Asda workers are, once again, bearing the brunt for TDR Capital’s financial engineering. This is yet further evidence that this model of private equity ownership is bad for workers and bad for the UK economy.”
An Asda spokesman said the move to hybrid working followed similar moves by other retailers, such as Tesco.
“This approach brings us in line with our competitors and the wider market, allowing us to build high-performing teams with a collaborative culture and respond to our business needs. The change is effective from January 2025 to allow time for all colleagues to make any necessary arrangements.”
