Allan Leighton, Asda’s chairman, has launched his first round of cost-cutting at the supermarket as he scrambles to overhaul the troubled business.
Mr Leighton last week unveiled the departure of 14 regional managers as part of a shake-up aimed at trimming headcount and improving performance.
The restructuring comes after a disastrous festive period for Asda, which suffered its worst Christmas since 2015.
Sales slumped by 5.8pc in the 12 weeks to Dec 29, reflecting the scale of the challenge facing Mr Leighton, who replaced Lord Rose as chairman late last year.
The decision to wield the axe so early in his tenure could represent a sign of things to come. The Telegraph revealed in November that more job cuts are on the horizon in 2025.
In a memo released to staff on Jan 7, Asda bosses confirmed that the restructuring will mean that supermarkets and express stores will now be managed across 22 “sub-regions”, down from 30.
This will mean fewer regional managers across the business with control over more stores.
“Change is never easy and unfortunately we have had to say goodbye to a number of colleagues,” the memo said.
Asda sparked controversy in November when it made almost 500 staff redundant without a consultation period.
The cost-cutting forms part of attempts to revive Asda’s fortunes. The retailer has been in steady decline ever since its takeover by private equity giant TDR Capital and brothers Mohsin and Zuber Issa in February 2021.
While it remains Britain’s third-largest supermarket, Asda’s market share fell to 12.5pc in December – down from 13.5pc last year.
Mr Leighton previously ran the business between 1996 and 2001. Since replacing Lord Rose in November, Mr Leighton has vowed to “restore Asda’s DNA” by cutting prices and improving product availability.
However, he has warned that it could take as long as five years to improve the supermarket’s fortunes, raising questions over the stewardship of majority-owner TDR Capital.
A spokesman for the GMB union said: “TDR are driving a once thriving business into the ground, making Asda workers’ jobs harder in the process.
“Despite this, TDR executives have dished out bonuses to themselves.”
Recently-filed accounts for the private equity giant revealed that its partners shared £44m between them last year, with its highest-paid partner receiving £2.9m.
An Asda spokesman said: “We made changes to our field-based retail team regions to reflect the scale of our business across large stores and convenience. These changes set us up to serve our customers in the best way for 2025 as we deliver Asda Price and other exciting propositions.”
