Tesco has is to axe more than 300 regional office roles as it looks to make savings of £500m this year.
Many of those whose jobs will disappear will be encouraged to apply for the 500 existing vacancies in its head office, the company stated.
Pay for workers at Tesco stores and the group’s Booker wholesale business will rise by 20p to £10.30 an hour (£10.98 in London) – the third pay rise for many staff in 13 months, amounting to an 8% rise over the year.
Workers are also likely to see a further pay rise in spring 2023, after the firm brought forward its next pay review to January. Usually, pay rises are implemented in August at Tesco.
Lidl and Aldi remain the best paying supermarkets in the UK, with hourly rates of £10.90 and £10.50 respectively outside London and up to almost £12 within the M25.
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Sainsbury’s workers will next month receive a 25p an hour increase to £10.25, with the rate for staff in London stores increasing from £11.05 to £11.30. At M&S the standard rate is £10.20 after a pay rise implemented on 1 October.
Retailers will be aiming to lure thousands of temporary staff for the peak Christmas season and Tesco will be hoping that the pay increases will improve its attractiveness.
A spokesperson for Tesco said: “Last month we announced some changes to a small number of roles in our office and regional teams, to ensure our business is as simple and efficient as possible, and so we can continue to invest for our customers. This means a reduction of around 325 roles. We currently have over 500 vacancies in our office and will work with colleagues to find alternative roles wherever possible.”
The announcements on pay and prices came as Tesco revealed a drop in pre-tax profit for the six months to 27 August to £413m. Sales, however, rose 6.7% to £32.5bn.
Tesco chief executive Ken Murphy said: “We know our customers are facing a tough time and watching every penny to make ends meet. As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.”
Murphy added that the government ought to cut the burden of business rates, a tax based on property, by a fifth and to make up the difference by increasing an online sales tax.
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