Asda at a crossroads after Sainsbury's merger blocked

More than 2,800 Asda workers face the threat of redundancy as Britain’s third-largest supermarket chain looks to cut costs.

The retailer, which asked workers to sign up to a controversial, more flexible employment contract last year, has told staff working in administrative, cash office and personnel roles that their jobs are at risk.

The consultation process is understood to have begun on Thursday.

Gary Carter, a national officer at the GMB trade union, said: “Off the back of the dispute we had last year about pay – and coming shortly after Christmas – this is quite devastating news for Asda staff. It has been one round of redundancies after another.”

Asda is at a crossroads after last year’s £7bn merger with Sainsbury’s was blocked by Britain’s competition watchdog. Its American owner, Walmart, has since said that it was “seriously considering” seeking a stock market listing for the business, although preparations for a flotation could take years, according to Judith McKenna, chief executive of Walmart International.

The cost-cutting comes after a tough Christmas for the big four supermarkets. Tesco, Sainsbury’s, Asda and Morrisons all lost sales to the fast-growing discounters Aldi and Lidl. Amid a welter of price cuts and promotions, the grocery industry recorded its slowest growth in at least four years at just 0.2% in the 12 weeks to 29 December.

Asda is proposing halving the back-office workload in each of its 639 stores. With the 45-day consultation period now under way it is anticipated that redundancies will begin in April. It is not clear how many of the 2,832 jobs singled for consultation will be eliminated, but the retailer is seeking “significant hours reductions” in the affected departments, according to the GMB. There have been several similar job-cutting exercises in recent years.

“The way in which we operate our store-based back office has evolved over recent years to adapt to changing customer behaviour, such as an increase in card payments over cash,” said Asda in a statement.

“As a result, we are proposing some changes to increase efficiencies and simplify ways of working across administration, compliance and cash office. We have opened a collective consultation with those colleagues impacted and their representatives and will have conversations about any potential change with our colleagues first.”

Source: The Guardian