13th Jan 2015 13:05
LONDON (Alliance News) - J Sainsbury PLC Tuesday said it is planning to cut around 500 central roles, part of its plans to achieve GBP500 million in cost savings over the coming three years.
In a statement, Sainsbury's said it has undertaken a "thorough review" of its central costs and structures for each of its divisions, and has decided to streamline its central divisions and bring its supermarkets and convenience businesses together.
"These savings, which will be made over the coming three years, will help fund future investments in areas which really matter to customers," it said.
The supermarket chain said around 500 central roles will be cut, spread across all divisions and grades in its store support centres.
"I recognise that these changes will be difficult for our colleagues and I can assure you the decision to make them was not taken lightly. However, I?m certain that we will be in a stronger position to deliver our new strategy and better equipped to win in these times of change as a result," said Chief Executive Mike Coupe in a letter to colleagues.
Sainsbury's said it has now started the formal consultation and expects the new structures to be in place by the start of its next financial year in mid-March.
The news comes just a week after the grocer reported its first fall in Christmas sales for more than a decade and again said its trading outlook is challenging, but the sales drop wasn't as bad as expected thanks to strong sales of clothing and from its convenience stores.
Sainsbury's has said that it is investing GBP150 million a year for the next three years in price cuts. However, its falling earnings and the need for investments in price cuts is weighing on the company's dividends, as it is at its rivals.
Sainsbury's shares were trading 4% higher at 249.90 pence Tuesday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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