Dearbail Jordan & Emma Simpson
BBC News
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Sainsbury’s has announced it will cut 3,000 jobs as it shuts down its remaining cafés and closes its patisserie and pizza counters.
The supermarket says the move will “simplify the business”, adding that most Sainsbury’s shoppers “do not use the cafés regularly”.
Sainsbury’s also plans to make a 20% reduction in senior management roles, saying the business faces a “particularly challenging cost environment”.
Although Sainsbury’s was already in the midst of a plan to save £1bn over the next few years, the BBC understands the rise in employer’s National Insurance contributions set out in the Budget has also been a factor in the latest restructuring plan.
Rival Morrisons has also announced plans to axe 201office-based jobs.
A spokesperson for the supermarket said it was planning to “remove the roles of Regional People Manager, Store People Manager and Case Specialist from our structure, meaning colleagues in these roles are being placed at risk of redundancy”.
Food counters
In response to Sainsbury’s announcement, Downing Street said: “As we said at the Budget, difficult decisions were needed to restore economic stability, and put the public finances back on to a stable footing.”
Sainsbury’s recently reported strong Christmas trading and said it expected annual profits to surpass £1bn.
But when he unveiled the trading figures earlier this month, chief executive Simon Roberts repeated his warning about the impact of measures announced by Chancellor Rachel Reeves and said there would be “tough choices”.
Sainsbury’s has said the rise in employer’s NI contributions will cost it £140m from April.
The industry trade body, the British Retail Consortium, reckons higher costs for retailers will impact investment, jobs and lead to higher prices.
Shadow business secretary Andrew Griffith said the cuts by Sainsbury’s were “devastating but no surprise”, adding that the government should “undo its jobs tax”.
In the Budget, Reeves announced that the rate of National Insurance paid by employers would rise to 15% in April while the salary threshold at which payments begin would drop from £9,100 to £5,000.
The government expects the measure to raise £20bn.
Early last year, the previous Conservative government twice cut National Insurance payments made by workers, reducing the rate by 4% in total at a cost of billions of pounds.
‘First of many’
This is the second wave of major job cuts for Sainsbury’s in just over a year. Last February, it announced 1,500 roles would go.
The supermarket group, which owns Argos and Habitat, will shut down its remaining 61 cafés and, as well as pizza and patisserie, will also dispense with its hot food counters.
Instead, it will make “the most popular items available in the aisle”.
Jobs will go from Sainsbury’s head office as part of an update of its divisions and management “to drive faster decision-making and bring costs down”.
A fortnight ago, Sainsbury’s said it would raise its average hourly pay by 5% to £12.60. But the wage increase will be introduced in two phases “to help manage a particularly tough cost-inflation environment”.
The Unite union said the job cuts were “a blatant example of profiteering on the backs of workers”.
Paul Travers, Unite’s officer for food, said the supermarket should be “ashamed” for cutting jobs while making millions of pounds in profit.
But Catherine Shuttleworth, chief executive at retail marketing firm Savvy, said Sainsbury’s cuts are “likely to be the first of many” for the retail industry.
“As expected, services to shoppers will be cut as retailers wrestle with the increased costs of labour as a result of the Budget,” Ms Shuttleworth said.
“But what’s clear from Sainsbury’s statement is that retail organisations will have to make difficult decisions at all levels of the organisation both in stores and behind the scenes in head office too.”
