Daily Management Review

Cost Reduction At Tesco Could Costs Thousands Of Jobs: Reports


The largest supermarket chain of the United Kingdom Tesco is planning to close down its in-store meat, fish and delicatessen counters as well as making use of vending machines in place of staff run canteens which would result in the company having to cut down on about thousands of jobs related to these business activities. This was published in the Mail newspaper on Sunday quoting sources in the industry.
The report stated that the changes being brought in the company could result in as much as 15,000 Tesco employees being put at risk of losing their jobs. The report further stated that the majority of the affected employees would be those working in the 732 larger stores of the company. Sources were quoted in the report saying that the company could make the announcement later this week.
The report also claimed that a spokesman for Tesco declined to comment on the details presented in the report. “We’re always looking at ways to run our business more simply and efficiently,” he the spokesman reportedly said.  “Whenever we make changes in our business, colleagues are always the first to know,”, he added.
The report noted that some fresh food counters would be closed by the company and would also delay the time of opening hours for some of the other stores. The report further added that a number of changes were also being contemplated with respect to the bakeries in the stores of the company such as by replacing the fresh dough used currently with frozen dough.
In October 2016, a plan was strategised and announced by Tesco where in the supermarket chain planed to reduce the operating costs by 1.5 billion pounds or $2 billion over a period of three years increasing the efficiency of its stores and the distribution network.
As a part of the cost reduction plan, Tesco has already reduced about 1200 jobs over the last two years mostly at its head office as well as cut 1,100 jobs in Cardiff by closing down its customer service center. All of the convenience stores of the company have also been streamlined in terms of their management.
Apparently, these measures seem to be working well for the company because during the important festive trading period Tesco fared better than its rivals. It is critical for Tesco as a group to bring down its operational costs in order to attain the profit margin that has been targeted by it for the 2019-2020 financial year.