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Supermarket giant Tesco have said it is planning to cut more than 300 head office jobs in order to save money. This comes at the same time shop workers are receiving a pay increase for the third time in 13 months. Tesco, which is the UK’s biggest retailer, said it is aiming to make savings of £500 million this year.
The company issued a warning that profits could be hit by inflation, after revealing an almost 64% decrease in its half-year profits. The plans to save this money include consulting on 325 job cuts in head office and regional management teams. These consultations began in the last fortnight. However, the retailer also said that they would try to move those losing their jobs into other roles within head office, with 500 other vacancies available.
Other changes include introducing more automated tills and reducing the number of suppliers. These changes could put the company on track for full-year profits of £2.4 billion to £2.5 billion, which is still £100 million less than forecast.
Not only are customers tightening their purse strings, but high energy prices are continuing to drive up running costs for stores. The Christmas period ahead also looks uncertain, with many unable to ascertain the impact the cost-of-living crisis could have during the festive months.
Despite this, however, shop workers will receive increased pay. From November 13th of this year, the basic hourly rate of pay in Tesco stores with increase by 20p per hour. This will raise wages to £10.30 per hour, or £10.98 in London stores. This brings the total pay rise rate for Tesco employees to 8% this year.
But cutting jobs for some and raising pay for others aren’t the only changes the retail giant are making. The company also announced it will be freezing prices on more than 1,000 products until 2023. It also said they are planning to double the size of their fast track grocery delivery service, Whoosh by the end of the year.