Tesco To Axe Thousands Of Head Office Jobs

Tesco has begun a cull of head office staff that is expected to involve thousands of job losses as its new chief executive slashes costs and strives to reinvigorate the UK's biggest retailer.

Sky News has learned that the company has in recent days begun informing senior staff of changes to the structure of its head office functions, which currently employ around 8,000 people.

Insiders said around 120 business unit leaders had commenced individual discussions with hundreds of directors across the Cheshunt and Welwyn Garden City offices on Wednesday, with talks set to continue on Thursday and Friday.

Those affected include senior employees at commercial and category director levels.

Dave Lewis, Tesco's new chief executive, said earlier this month that as much as 30% of its head office cost-base could be removed as part of his transformation plan.

While part of these savings will relate to areas other than headcount, senior sources predict that "at least" 2,000 jobs at Tesco’s headquarters will disappear over time.

No final number has been determined yet, with further decisions about role reductions further down the head office structure to be made in the coming weeks, one insider said.

The scaling back of some of its international operations meant there was unnecessary duplication of some functions, they added.

As part of his efforts to revive Tesco following a £263m commercial payments scandal and a slump in sales and profits, Mr Lewis has decided to vacate the Cheshunt site which has been its home for decades.

He is also planning to sell non-core businesses and has drafted in Matt Davies, the boss of Halfords, to run its UK operations.

News of the head office cuts comes just a day after Tesco outlined details of dozens of store closures , which will result in as many as 2,000 more jobs being axed.

Among the 43 shops being shut will be a number of its larger-format superstores and half a dozen of its non-grocery Homeplus outlets.

The changes demonstrate the pace at which Mr Lewis, who also sits on the board of Sky, the parent of Sky News, is tackling the malaise which had engulfed Tesco in recent times.

Under his predecessor, Philip Clarke, who was ousted last summer, Tesco saw sales decline even as the company's head office cost-base grew by 30% between 2011 and 2014.

Analysts accused Mr Clarke of failing to anticipate the growth of discounters Aldi and Lidl and of not acting sufficiently quickly to unravel expensive mistakes made by Sir Terry Leahy, who he replaced in 2011.

The Serious Fraud Office is now investigating how Tesco came to overstate profits by £263m, with supplier payments at the centre of its inquiry.

Nine executives were suspended, with four having since left the company and one being reinstated.

Last week, Sky News revealed Tesco had narrowed the search for a successor to Sir Richard Broadbent to Sir Ian Cheshire, the recently departed chief executive of Kingfisher, and John Allan, the chairman of housebuilder Barratt Developments.

Tesco declined to comment.