Tesco to axe TEN THOUSAND jobs as part of plans to revive struggling fortunes after slump in sales and shares following series of fraud investigations
The crisis-hit retailer is apparently planning to slash 6,000 posts from its head offices and stores in a bid to revive the group's fortunes after a disastrous 2014.
Dave Lewis, who took over last year, also wants to strip out an entire layer of management from Tesco stores, putting thousands of jobs at risks.
The cost-cutting drive will also see the closure of the chain's corporate headquarters in Cheshunt, Hertfordshire, it is reported.
The scale of the cuts reiterates the huge challenges facing Tesco, as it tries to recover from a slump in sales, a series of profit warnings and a criminal investigation into a £263m accounting blackhole, which hammered the reputation of Britain's largest supermarket chain.
It comes just two weeks after the chain announced it would be closing 43 'unprofitable' stores, with the loss of around 2,000 jobs.
The sweeping closures are set to dismantle the legacy of former chief executive Sir Terry Leahy, who grew the company exponentially while he was at the helm.
According to the Sunday Telegraph, Mr Lewis wants to remove managers who work between the store manager and shop assistants in a dramatic overhaul of the way stores are run.
Those affected will reportedly be offered alternative roles, but it is not clear if they will be on the same level of pay or even the same number of hours.
Mr Lewis also wants to cut the cost of the chain's head offices by around 30 per cent in a bid to save £250million. Many employees have already been offered voluntary redundancy since consultations began at the end of January.
The final number of job losses will depend on the number of staff who opt for redundancy and how many chose to continue with the company in a different role.
Tesco refused to comment on the job losses.
The overhaul is the result of the group's failure to compete with budget rivals Aldi and Lidl, which led to a continuing slump in sales and a succession of profit warnings.
The latest industry figures from Kantar shows that Tesco sales are at their best since March 2014, but still fell by 1.2 per cent compared with last year.
The group is also still continuing to lose its market share at the expense of budget rivals and has dropped to 29.1 per cent from 29.6 per cent a year ago.
Last month, Tesco, which employs 310,000 people, announced it would be closing seven superstores and six Homeplus outlets.
At the same time, Tesco has also cancelled the building or opening of nearly 50 other outlets, many of them larger Extra supermarkets.
They included Tesco's £22m Chatteris store in Cambridgeshire which had been earmarked to open its doors to customers in September, but ended up on the scrapheap without serving a single customer.
It was anticipated the store would create around 250 jobs but it has remained empty since its completion.
The Express and Homeplus stores will close on 15 March, with the Tesco Metros and superstores on the list closing on 4 April.
Tesco shares fell by more than 40 per cent in 2014, a nightmare year for the chain in which it faced a string of profit warnings, the departure of Mr Lewis's predecessor Philip Clarke, and a £263m accounting scandal, which is being investigated by the Serious Fraud Office.
Tesco was already facing an investigation over the errors by the accountancy watchdog the Financial Reporting Council (FRC), as well as by the Financial Conduct Authority, the City regulator. That inquiry was discontinued after the SFO's probe was announced.
This month, it was also announced that the Groceries Code Adjudicator is examining Tesco's treatment of suppliers, amid allegations that it delayed payments to suppliers and unfairly handled payments for shelf promotions.
The blame for the company's sorry state has been largely laid with Mr Clarke, who shocked the market at the start of 2012 with the group's first profits warning in 20 years after poor Christmas trading.
He had taken on the role of chief executive in 2011, replacing Sir Terry Leahy.
Tesco later announced a £1billion revival plan, which would include store upgrades, more staff and better prices. But profits for the year to February 2014 were down again. Mr Clarke, who had been forced to brush off speculation about his future, finally announced in July that he would be leaving.
As Mr Clarke stepped down, Tesco announced that trading had been 'more challenging' than anticipated, and sales for the first half of the year were 'somewhat below expectations'.
A trading update in June had shown a 3.7 per cent fall in like-for-like sales, which Mr Clarke admitted were the worst figures experienced by the supermarket in years.
But Mr Clarke is still believed to have received £1.2million in salary and benefits on leaving the company, but there was a dispute over what he should be given for the six months he had planned to stay on, a figure equating to £575,000.
Meanwhile, Tesco was forced to suspend eight of its UK executives in the final quarter of 2014, after £2.1billion was wiped off its shares due to accounting errors, meaning profits would be £250million lower than expected.
The shock admission sent shares in Britain's biggest supermarket chain down by 10 per cent, their lowest level in 10 years.
The error was brought to the attention of Tesco's general counsel by a whistle-blower before being passed to Mr Lewis, who carried out a preliminary investigation. He then issued the company's third profits warning in three months.
The group has since named turnaround specialist Matt Davies, currently boss of Halfords, to lead its UK and Ireland business from June.
It also plans to slash capital spending to £1billion for the next financial year, the same as it spent in the first six months of 2014/15 and less than the £2.7 billion invested in the 2013/14 financial year.
Last year, Asda also announced 1,360 redundancies after a shake-up of the management structure, while Morrisons cut 2,600 posts. Sainsbury's said it would cut 500 posts.
Tesco is still looking for a chairman to work alongside Mr Lewis, following the resignation of Sir Richard Broadbent.
Tesco's fall from grace: Where did it all go wrong?
For a time, Tesco was experiencing an unprecedented boom. In just 13 years, its profits grew more than four-and-a-half times.
In 2007, shares hit a record and former Chief Executive Officer Terry Leahy was knighted, making the company a celebrated titan of British corporate success.
Back then, the chain's biggest challenge - when its profits peaked at £3.4billion in 2010 - was convincing critics that its 31 per cent monopoly of the grocery market was not unfair on smaller shops.
But the cracks started to show in 2012, as the chain began hemorrhaging customers to budget supermarkets Aldi and Lidl.
Soon enough, Tesco had shocked the market with its first profit warning in almost 20 years, a revelation which saw shares plunge by as much as 15 per cent.
Then, in April 2013, Tesco reported its first fall in annual profits in 19 years, with those at the helm having to defend a 96 per cent drop in post-tax profit in just one year.
It then decided to ditch its chain of US stores Fresh & Easy, which failed to make profit, despite more than a billion pounds of investment.
It also had to write off £804million for land bought at the height of the property boom, which it decided would not be developed following the financial crisis.
Tesco tried its hardest to battle the cheaper stores, focusing on special offers and discounts for its cash-strapped shoppers.
But efforts to claw on to loyal customers came too late and the nation began to fall out of love with Britain's biggest retailer. Profits continued to fall and the market share was squeezed again to 28.6 per cent in March last year.