202 jobs axed as Asda adapts to new era
The job losses, which affected every rung of the management ladder, represented the lions’ share of a programme to make 202 management roles redundant.
The other 50 plus roles were lost in Lutterworth in Leicestershire, where Asda’s clothing arm George is based.
The highest profile redundancy is Karen Hubbard, executive director for property, who joined Asda five years ago and helped oversee the integration of the Netto stores.
Asda’s chief executive Andy Clarke said in a memo to staff: “Karen has been assessing the option of an international role with Walmart but has elected for personal reasons not to pursue an international posting. It is therefore with a degree of regret that I advise that Karen’s last day with Asda will be March 31.”
Ms Hubbard’s remit covering estates and acquisitions, construction, and market evaluation will move across to finance under the leadership of Alex Russo.
Her role covering large formats, small formats, macro space, and store planning will move across to customer and marketing under the leadership of Steve Smith.
Ms Hubbard said: “It has not been an easy decision but with the corporate strategy firmly in place and implementation now underway, I feel now is the right time to start a new chapter in my career.”
Mr Clarke said the redundancies will remove duplication and prepare the business for the structural changes in the grocery market.
“The customer has changed the way they shop. They’re shopping online, home delivery, click and collect and in smaller stores. The shape of the business is changing,” he said.
He added that the changes are not just due to the rise of German discounters Aldi and Lidl.
“We’re representing value in the UK. There is a market for us to support. There is Aldi at one end and the premium retailers at the other. We can clearly differentiate between,” he said.
Mr Clarke said there are no immediate plans for any other redundancies.
“The job losses go from the top, all the way through both buildings [Asda House in Leeds and George House in Lutterworth]. Organisational change isn’t fixed and you can’t say it will never change again,” he said.
“We haven’t got anything else we’re about to communicate, but it would be wrong to say there won’t be more changes in the future.”
He added that when it comes to further job losses he would look to Asda’s competition rather than Asda. However, he declined to be drawn on whether he thought rivals would announce similar culls.
Earlier this month Bradford-based Morrisons announced plans to invest £1bn in price cuts.
Mr Clarke told colleagues: “For further reinforcement of our strategic direction the news from our competitors in recent weeks highlights that the trends we identified at the end of 2012 signalled a permanent structural change in the market.
“In order to deliver our strategy we need to have an organisation structure where accountabilities are clear, duplication is removed, and decision-making is swift and decisive.
“It’s important to me that we lead the design of this structure right from the top of Asda.”
The redundancies affect five per cent of the workforce at the two sites, which employ 4,000 managerial staff.
Shopfloor workers will be unaffected.
Mr Clarke said the changes are part of a five-year plan to cope with permanent structural changes in the market.
He denied that the redundancies were the culmination of a review by management consultants McKinsey.
“McKinsey had a part to play, but we’ve also worked with PwC. I’d suggest they’ve been more involved in the work,” he said.
Mr Clarke refused to be drawn on the cost savings that will be made from the redundancies, but said the proceeds will be re-invested back into the business. Asda said the savings will be “multi-million”.