Sainsbury’s to cut 3,000 jobs and shut in-store cafes

Sainsbury’s has announced it will cut more than 3,000 jobs and plans to shut its remaining in-store cafes as part of a major overhaul.

The headcount reduction represents about 2% of the company’s current 148,000-strong workforce.

It will see about 20% of senior management roles cut at the supermarket giant as part of plans to focus on fewer, bigger roles and to simplify its head office and management teams.

The retailer also said it had decided to close its remaining 61 Sainsbury’s Cafes, subject to consultation.

The majority of Sainsbury’s shoppers do not use the cafes regularly, whereas in-store food halls and concessions have grown in popularity, it said.

Sainsbury’s said it will also close its remaining patisserie, hot food and pizza counters in-store and make the most popular items available in the aisles instead.

The head office job losses will take place over the next few months.

Simon Roberts, Sainsbury’s chief executive, said the supermarket was facing a “particularly challenging cost environment” as it moves forward with its company strategy.

He said: “As we accelerate into year two and beyond of our strategy, we are facing into a particularly challenging cost environment which means we have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective.

“The decisions we are announcing today are essential to ensure we continue to drive forward our momentum but have also meant some difficult choices impacting our dedicated colleagues in a number of parts of our business.

“We’ll be doing everything we can to support anyone impacted by today’s announcements.”

The cuts come after Sainsbury’s announced its “biggest ever” Christmas trading period and said profit for the full-year would likely be between £1.01 billion and £1.06 billion earlier in January.

But the supermarket is also trying to cut costs by £1 billion-a-year, and last year it cut about 1,500 roles, mostly from a contact centre in Cheshire.

The latest job cuts will see the company “explore redeployment opportunities where this is possible” for people affected.

The company said in late 2024 that tax increases from the October Budget would hit it with an extra £140 million in costs, warning that the changes would also lead to higher inflation.

Labour has said it will make companies pay more in national insurance contributions, as well as raising the minimum wage.

The policy is designed to fund improvements to public services like the NHS, but some companies have criticised it for making it more expensive to employ people.

Sainsbury’s said earlier in January that it would give staff a 5% pay increase in 2025 to help workers through a “particularly tough cost inflation environment”.

Following the announcement, a Downing Street spokesperson stressed that “difficult decisions” in the Budget would help pave the way for economic growth.

Asked how the Government would respond to suggestions that lay-offs at the supermarket were influenced by the Budget, the Prime Minister’s official spokesman said: “Growing the economy, backing businesses, putting more money in people’s pockets are obviously the priority.

“It is only by growing the economy we can fund our public services and raise living standards.

“But as we said at the Budget, difficult decisions were needed to restore economic stability, and put the public finances back on to a stable footing following the £22 billion black hole, and that was a pre-cursor to driving economic growth.”