Tesco to slash 1,000 jobs in shake-up of its distribution centres

Supermarket said it also hopes to create another 500 new roles as part of the plan

(Reuters)

Tesco said it will make 1,015 people redundant as part of a shake-up of its UK distribution network.

The supermarket said it would shut its Welham Green and Chesterfield sites, cutting the number of distribution centres from 25 to 23. The rest of the cuts will come from a management reshuffle.

However, the company said it also expects to create 533 new roles throughout its network with Reading, Middlesborough and Daventry among the areas to benefit most from the overhaul.

The UK's largest retailer is also axing a warehouse relationship with logistics firms DHL and Wincanton. The changes are expected to be in place by June.

Matt Davies, Tesco’s UK and Republic of Ireland chief executive, said in a statement: “As the needs of our customers change, it’s vital we transform our business for the future.

“As part of this we are proposing to close two of our distribution centres in the UK. These changes will help to simplify our distribution operations so we can continue to serve our customers better.

“Our priority throughout this process has been our colleagues and we will continue to do all we can to support them at this time.”

The changes come just days ahead of Tesco's Christmas trading update on Thursday. Analysts have predicted a rise in profits for the six-week festive period.

Clive Black, head of research at Shore Capital, predicts the group will register 1.4 per cent sales growth, beating its main rivals.

Investors will be looking to assess any financial detriment caused by a cyber attack on Tesco Bank in October which saw the accounts of 9,000 customers hacked.

Shares in Tesco have fallen more than 8 per cent over the last month, underperforming the broader FTSE 100 bluechip index which has risen around 4 per cent over the same period.

Additional reporting by PA