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Supermarket chain Sainsbury’s is planning to cut 3,000 jobs across the retail giant as part of a restructuring plan. The company will close its cafés and withdraw from its patisseries and pizza counters to simplify its business due to a “particularly challenging cost environment”. Furthermore, it plans to slash 20% of senior management roles in order to achieve the restructuring goals.
Sainsbury’s had already been planning cost savings of £1bn over a few years. However, this latest restructuring plan also comes in response to the rise in employer’s National Insurance contributions set out in the recent UK Budget statement. The increase in these contributions means that the plan to cut the jobs would save the company £60m a year by 2024.
The supermarket chain is likely to incur £140m in extra costs from April due to increased employer National Insurance contributions. In a statement, the British Retail Consortium trade body warned that higher costs for retailers would affect investment, jobs, and lead to higher prices. Shadow business secretary Andrew Griffith said the job cuts were “devastating but no surprise”, adding that the government should “undo its jobs tax”.
This is the second wave of significant job cuts by Sainsbury’s in just over a year, and the union, Unite, said the job cuts were “a blatant example of profiteering on the backs of workers”. Data showed Sainsbury’s recent strong Christmas trading is expected to see annual profits exceed £1bn
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