Morrisons to axe 2,600 jobs in new management plan

By Michael Stones

- Last updated on GMT

Morrisons has revealed plans to cut 2,600 in a management overhaul
Morrisons has revealed plans to cut 2,600 in a management overhaul

Related tags Morrisons Retailing Ken morrison

Morrisons has revealed plans to cut 2,600 jobs in a management restructure, widely predicted earlier this month.

The retailer claimed the changes would modernise store management, by cutting management tiers, simplify responsibilities and improve customer service.

Dalton Philips, Morrisons boss, said: “This is the right time to modernise the way our stores are managed. These changes will improve our focus on customers and lead to simpler, smarter ways of working.

“We know that moving to the new management structure will mean uncertainty for our colleagues and we will be supporting them through the process.”

Seven tiers

Some stores were said to have seven tiers between the shop floor and the store manager.

Morrisons also announced plans to create 1,000 jobs in Morrisons M local convenience stores this year and an extra 3,000 jobs in new supermarkets. “Morrisons will look to offer displaced colleagues the opportunity to work in these growing businesses,”​ said the retailer.

Julian Wild, head of the food team at Rollits solicitors, said the cuts bought Philips some more time in his role as chief executive to make the changes work “but not long”.

Philips has been criticised by some City analysts for allegedly adopting the wrong business strategy, with an over reliance on food manufacturing. Sir Ken Morrison, the retailer’s former chairman, described Philip’s recovery strategy as “bullshit”,​ at the retailer’s annual general meeting earlier this month.

Wild told “They ​[Morrisons] are trying everything they can do to try to improve performance – from investing in price reductions ​[to respond to competition from discount stores Aldi and Lidl] to restructuring managment.”

The retailer was paying the price for being very late to launch both an online offer and develop convenience stores, he said.

But whatever the scale of the cuts, Wild warned they would not address the retailer’s key problem of the inherent inflexibility associated with a large manufacturing base.

Inherent inflexibility

“When Philips joined Morrisons I thought he would reduce its manufacturing capacity. Instead he has increased it,” ​said Wild.

“I cannot see the logic of owning a large manufacturing base. Whereas other retailers are squeezing their suppliers to reduce cost, Morrisons cannot do that because it owns a lot of its manufacturing capacity, which has no other outlet but to sell to the retailer.”

Meanwhile, the Union of Shop, Distributive and Allied Workers (USDAW) reacted with dismay to the news.

Joanne McGuinness,  Usdaw’s national officer representing Morrisons’ workers said: “The next few weeks will be a worrying time for our members in Morrisons and we will do everything possible to support them.

“Today marks the start of a 45-day consultation period, where we will look in detail at the company’s business case.”

McGuinness added the union’s priority was to safeguard as many jobs as possible, maximise employment and win the best possible outcome for members affected.

On June 6 a Morrisons’ spokesman declined to comment on media reports that the retailer was poised to announce 2,000 job cuts​.   

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