British supermarket group Morrisons plans to cut 3,000 management jobs as part of a workforce restructuring that will create 7,000 frontline jobs in its stores, it said on Thursday.
All of the company’s 492 UK stores will retain an overall manager but departmental roles – such as beers, wines and spirits managers – will be axed and managerial responsibilities for positions lost will be taken on by fewer managers with a broader remit.
“Whilst there will be a short period of uncertainty for some managers affected by these proposals, we will be supporting them through this process and there are jobs available for everybody who wants to continue to work at Morrisons,” said retail director David Lepley.
Morrisons, Britain’s No.4 supermarkets chain by market share, currently has a total workforce of a little more than 97,000.
Along with the rest of Britain’s traditional big four grocers – market leader Tesco, Sainsbury’s and Asda – Morrisons is chasing efficiency and cost savings to better compete with German-owned discounters Aldi and Lidl, which are winning market through aggressive expansion.
Tesco cut 4,500 jobs last summer and Sainsbury’s said on Tuesday that it is cutting “hundreds” of management roles.
Morrisons said the jobs created would include skilled butchers, bakers, fishmongers and other fresh food specialists, in addition to store assistants on the shop floor.
The company said the restructuring is designed to put more frontline staff in stores to better serve customers, rather than a pure cost-cutting exercise.
Morrisons was the big loser as Britain’s leading food retailers endured their worst Christmas since 2014, hurt by intense competition and sustained consumer uncertainty which deterred shoppers from splashing out.
Shares in Morrisons were down 1% at 1325 GMT, extending losses over the past year to 21%.
All affected stores will have a 45-day consultation period, with the cuts beginning in March.
The manager jobs at risk include in-store posts, and not office roles, the company said.
Jobs such as in-store beer, wine and spirits managers will be combined with other jobs.
Morrisons is not the only supermarket to be cutting management posts. All the big four UK supermarket chains are battling to retain market share amid fierce competition, particularly from discount chains Aldi and Lidl.
Earlier this week, Sainsbury’s said it was shedding hundreds of management roles, but did not confirm the number.
Sainsbury’s said the cuts were being made due to the integration of Argos, which it bought in 2016.
Asda has reportedly begun consultations with more than 2,800 staff over cutbacks. Reports say those working in administrative, cash office and personnel roles have been told their jobs are at risk.
Last mouth Argos staff Christmas bonus cut to just £5 by boss on £3.9 million
The millionaire boss caught on camera singing “We’re in the money” has halved Argos staff’s Christmas bonus to just £5.
Workers used to get £10 towards a seasonal bash before a takeover by Sainsbury’s – headed by Mike Coupe.
While Argos’ 16,000 sales staff earn a typical £11,931 a year, Mr Coupe pocketed £3.9million after his bonus soared to £593,000.
One insider said: “Argos cut the bonus to just a fiver in the same year the CEO takes £3.9million.
“It brings it in line with Sainsbury’s, rather than raise Sainsbury’s to £10. Great company.”
Dave Gill, of union Usdaw, said: “Given the company states they want ‘to create a fantastic team spirit’ with parties, this cut in budget could be seen as mean spirited.
“We have asked them to reconsider.”
The supermarket giant has already faced controversy over plans to cut paid breaks, special rates for Sundays and annual bonuses for its 130,000 shopworkers.
“We’re in the money”
Sainsbury’s saw its pre-tax profits surge to £635m, but suffered a hefty £46m hit from its failed merger with Asda.
The figures for the supermarket chain amount to a 7.8 per cent rise in underlying profits for the year to March 9.
However statutory after-tax profits dipped from £309m the previous year to £219m, weighed down by £396m of charges, including £46m in costs for the failed Asda deal.
This report was published in 2015 as an investigation into retailers pay practices and the taxpayer subsidy.
Taxpayers spend £11bn to top up low wages paid by UK companies
Research published by Citizens UK found that companies in the UK are paying their workers so little that the taxpayer has to top up wages to the tune of £11bn a year. The four big supermarkets (Tesco, Asda, Sainsburys and Morrisons) alone are costing just under £1bn a year in tax credits and extra benefits payments.
This is a direct transfer from the rest of society to some of the largest businesses in the country. To put the figure in perspective, the total cost of benefit fraud last year was just £1bn. Corporate scrounging costs 11 times that.
Worse, this is a direct subsidy for poverty pay. If supermarkets and other low-paying employers know they can secure work even at derisory wages, since pay will be topped up by the state, they have no incentive to offer higher wages.
None of this makes sense. We are all, in effect, paying a huge sum of money so that we can continue to underpay the 22% of workers who are earning below the Living Wage – the level at which it is possible to live without government subsidies. The only possible beneficiaries are business owners.
Please note all figures used in this report are from 2015 and hence should be seen as a snapshot from that time and not indicative of current pay practices or public subsidies. To date only one major supermarket, Aldi, is paying the real and London Living Wage to in-house staff. However Aldi does not pay the real Living Wage to contract staff.
In 2018 Sainsburys moved to paying above the real Living Wage to in-house staff outside of London (at £9.20 an hour). We are not aware of whether they pay the London Living Wage to staff in London, or if they pay a real Living Wage to contract staff.
The Real and London Living Wage are calculated as the minimum needed to meet the cost of living in the UK and London.
Sainsbury’s increases staff pay – but axes paid breaks and bonuses
Last year Sainsbury’s had been accused of “robbing Peter to pay Paul” with plans to increase basic pay for shop-floor staff but axe paid breaks, premium pay for Sundays and an annual bonus.
In the latest forecast, outturn spending on tax credits is estimated to be £25.8 billion in 2017-18, with around £0.6 billion of spending having been ‘lost’ to UC. We expect tax credits spending in 2018-19 to total £26.0 billion (on a ‘no-UC’ counterfactual basis), with 3.6 million recipients paid an average of £7,170 each. That would represent around 3.2 per cent of total public spending and 1.2 per cent of national income.
Reporting by Paul Knaggs