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Sainsbury's to axe 2,000 jobs in £500 million cost-cutting drive

In 2017, Sainsbury's has cut £150 million in a cost-cutting drive. Credit: PA

Sainsbury's is to cut around 2,000 jobs as part of a £500 million cost-cutting drive over the next three years.

The jobs the company is looking to cut will go from its payroll and human resources departments.

On Tuesday, J Sainsbury confirmed it had launched a consultation on plans to remove HR and payroll roles from its stores, which is expected to affect around 1,400 staff.

It will also restructure its central office operations by consolidating HR and additional support staff from across the grocery chain, Sainsbury's Bank, and Argos (which is also owns) and could see another 600 roles axed.

The announcement comes amid a major cost-cutting programme that has seen Sainsbury's commit to slashing £150 million of costs this year alone.

A spokesperson for Sainsbury's said: "The UK grocery market is changing at a rapid pace and it's crucial that we transform the way we operate to meet future challenges and continue to provide customers with best in class service.

"Following a comprehensive review, we are proposing some updates to our HR structures and systems, as well as changes to a number of other support roles, subject to consultation.

"This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected by the changes.

"We will support them in any way we can."

J Sainsbury - which employs around 195,000 staff across the UK - recently notched up its best supermarket sales for years, raising hopes of rising profits.

The company said in July that like-for-like retail sales including the recently bought Argos chain rose 2.3% in its first quarter.

Sales were boosted by rising inflation, as well as the later timing of Easter and Mother's Day, but the group said it also rung up a 1.9% rise in the number of transactions at its tills.

The sales hike was a marked bounceback from 0.3% growth the previous quarter as Sainsbury's cheered a rebound in total grocery sales, which leapt 3% higher.

This offset a slowdown in general merchandise sales - including Argos - to 1% from 1.5% the previous quarter amid an overhaul following last year's £1.4 billion takeover of Home Retail Group.