Supermarket giant Asda has decided to axe hundreds of jobs while sales slump in the latest of a series of controversial moves as its new boss insists ‘change is never easy’.
A major shake-up for the chain will also see head office staff ordered back to their desks for at least three days a week following the latest change in leadership at the private equity-owned retailer.
In an internal email on Tuesday, Asda confirmed that 475 workers would be made redundant at its head offices in Leeds, West Yorkshire, and Lutterworth, Leicestershire.
This represents less than 10 per cent of the retailer’s head office workforce.
Additionally, fixed-term contractors working on Asda’s IT transformation project have also been ordered to leave in the coming months.
It also comes as staff at 20 Asda stores across the UK complained new the 11-hour shifts were ‘physically demanding’ and left them worn out on their extra day off (File image)
Retail veteran Lord Stuart Rose (pictured) has taken over the reins at the firm
The letter from new chairman Lord Stuart Rose and board director Rob Hattrell said: ‘Change is never easy and is unsettling, but the executive team believe it is necessary to enter 2025 in a stronger position, fully focused on serving our customers, delivering our ambitions and driving long-term growth.’
Former Marks & Spencer boss Lord Rose is leading the business alongside former eBay senior vice president Rob Hattrell after co-owner Mohsin Issa stepped back from running Asda in September.
Mohsin, 53, remained co-owner of the supermarket alongside private equity firm TDR Capital, but relinquished his executive role in favour of the retail veteran Mr Rose.
Younger brother Zuber, 52, had already headed for the exit, stepping down as co-chief executive in June and selling his stake to TDR Capital.
Mohsin (left) and Zuber (right) Issa purchased Asda in 2021. A year later, they agreed to buy the Co-op group’s petrol stations for £600million
Now, Lord Rose, who previously said he was ’embarrassed’ by the grocer’s recent performance, has taken the reigns from the brothers as he battles to boost the ailing retailers fortunes.
Other controversies this year include Asda eventually ditching its four-day week after staff complained the new 11-hour shifts were leaving them too tired and workers suing the company after raising complaints their co-workers in the warehouses received a higher wage.
Asda ‘strongly rejected’ the claim its pay rates were influenced by gender.
In relation to the four-day working week, the supermarket had launched a pilot of flexible working patterns for managers last year.
Staff in the trial at 20 Asda stores worked 44 hours over four days rather than five for the same pay.
Asda workers sued the supermarket raising complaints that their male co-workers in the warehouses received a higher wage (stock image)
The grocer is still testing a working pattern that involves doing 39 hours across five days — which works out at just under eight-hour shifts — without a reduction in pay, claiming this ‘proved popular’.
In the new letter rubber stamped by Mr Rose, Asda told staff at its three head office locations across Leeds and Leicestershire that they would reduce hybrid working in a bid to improve collaboration and communication.
Head office workers will need to be present at one of its main office locations for a minimum of three days a week from January next year.
The retailer said it will refresh its Asda House office in Leeds with an improved catering offer, onsite Asda Express and more meeting spaces as part of the strategy.
It comes ahead of Asda’s latest quarterly results update on Friday.
The business revealed in August that its sales dropped further over the latest quarter as it lost more customers to its largest rivals.
It saw total revenues, excluding fuel, rise 2 per cent for the first half of 2024, although like-for-like sales slipped by 2.1 per cent.
Revenues in the second quarter of the year were down 2.2 per cent, with a 5.3 per cent like-for-like decline, as its sales slump accelerated.
Saddled with debts of over £4billion, it has spent nearly two years looking for a chief executive after Roger Burnley quit following the brothers’ buyout.