Tesco announces that it is closing two of its distribution centers as a part of the restructuring of its UK operations leading to a staff cut of 500 employees. Tesco, Britain’s biggest retailer, will shut down its warehouses in the area of in Welham Green, Hertfordshire, and Chesterfield, Derbyshire, as well as overhaul the management of its distribution network.
The shutting down of these plants would lead up to 1,1015. But Tesco has plans to create 533 of these jobs in other areas such as Reading, Middlesbrough and also in Daventry, Northamptonshire. The rest of the staff were not able to find different roles suitable for them within the company.
Tesco has to face these changes under chief executive Dave Lewis design to revitalise the retailer after a major slump in sales and profits. Tesco said in a blog post that, “These changes form part of a wider programme of transformation, which has been taking place over the last two years, to ensure Tesco is set up for the future in a rapidly changing retail sector”.
Now there will be 23 Tesco distribution centers in the UK. The plans to move their grocery activity from Welham Green to Reading. Most of its non-food items will be moved from Middlesbrough after the closure of its Chesterfield site. Matt Davies, Tesco UK&ROI CEO, said:
“As part of this, we are proposing to close two of our distribution centers 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 Guardian reported that Tesco is going to bring all warehouse operation run by logistics groups DHL and Wincanton in-house. Tesco back in 2015 reported a £6.4 billion pre-tax loss, marking itself as the biggest in British corporate history which was followed by a £326m accounting scandal.During this time Tesco hired Lewis who tried to rebuild Tesco by introducing new products, cutting prices and improving the availability of Tesco’s key products.
Tesco has over 300,000 employees in the UK; the company plans to announce the vital numbers from the Christmas season on Thursday.