J Sainsbury's, Britain's second-largest supermarket chain, is cutting 3,000 jobs, including senior managers. Britain's second-largest supermarket chain has accelerated cost cuts after the Labor government increased taxes on employers in its October budget.
The layoffs, which amount to 2% of the group's workforce, are caused by the closure of 61 remaining in-store cafes and sweeping management changes.
Sainsbury's said on Thursday it expected to cut around 20% of its senior management roles.
It comes after dozens of major UK retailers, including Sainsbury's, warned in November that rising costs from the Budget would lead to job losses and higher prices for customers.
The move by one of Britain's largest private sector employers will create awkward timing for Chancellor Rachel Reeves, who is trying to attract attention at the World Economic Forum in Davos. business leaders and foreign investors.
A survey of finance chiefs carried out by the British Retail Consortium earlier this month showed that more than half of UK retailers said they would reduce staff working hours and the number of staff at their head offices.
The job cuts come after Sainsbury's announced last year that it would cut costs by a further £1 billion over the next three years.
The restructuring also comes against the backdrop of what chief executive Simon Roberts described as a "particularly challenging cost environment" as retailers grapple with rising costs and taxes.
The retail industry is expected to see annual costs of up to £7 billion, mainly due to increases in National Insurance contributions and the National Living Wage.
Sainsbury's faces a £140m tax bill hit in the budget. Some changes to its workforce were driven in part by that decision, according to a person familiar with the matter.
In October, Reeves announced that employers' national insurance contribution rates would increase by 1.2 percentage points to 15% from April, while the income threshold for the tax would be reduced from £9,100 to £5,000.
The minimum wage will also rise, adding to cost pressures on employers.
Shadow business secretary Andrew Griffith said: "This news from one of the UK's largest retailers is shocking but not surprising. 3,000 jobs will disappear as a result of Labour's budget , 3,000 families will suffer without regular wage protection.”
The grocery chain, which owns Sainsbury's and Argos, said it was overhauling the structure of its central management team to "support faster decision-making and improve performance".
This will result in fewer, larger and more clearly defined roles at the headquarters, the company said, adding that the changes will take effect in the coming months.
Roberts said businesses "have to make hard choices about what we can afford to invest and where we need to do things differently to make our businesses more efficient and effective".
Clive Black, head of consumer research at Shore Capital, said Sainsbury's has unveiled "further and increasingly necessary steps following the Autumn Budget to manage its cost base to deliver sustained growth." invest".
He added: "Although very difficult, these measures are necessary for us, especially in the face of a significant expansion in UK government-funded costs."
Separately, the finance chief of Associated British Foods, which owns fashion chain Primark, warned that consumers' reluctance to buy clothes was partly due to increased uncertainty about job security.
On Thursday, the company cut its 2025 sales forecast for Primark, blaming wary consumers in its core UK market.
Chief Financial Officer Eoin Tonge said that "other businesses - not us - are starting to talk about employment levels and recruitment, and the recruitment of temporary workers" and "the specter of job losses seems to be rising", with a knock-on effect on consumer confidence.
He added: “We are seeing, especially among those on lower incomes, consumers becoming more[selective]in their buying habits.
"We need a different narrative, we need a more upbeat, positive, front-footed narrative to get some energy back into the system."