Why Asda’s bleak Christmas message to staff is so brutal

As days for miserable news go, this one will take some beating. And that’s even more the case if you happen to be one of the 5,000 Asda head office staff digesting the latest message from management.

Incongruously titled ‘A message from Stuart and Rob’, the email landed in the inbox of Asda staff less than 24 hours ago. It brought the brutal announcement of a swathe of cuts to jobs, including management roles.

The duo in question are of course Asda chair turned interim CEO Stuart Rose and TDR Capital’s IT boss Rob Hattrell, who – as well as almost 500 head office job cuts – also used the email to break the news that Asda would be imposing a new compulsory hybrid working regime. The new system means staff will have to work three days a week from their respective offices in Leeds and Leicester, as part of a wider streamlining of management.

A bit like a family bereavement, it doesn’t actually make much difference if such brutal news comes just before Christmas or not. But the fact that Asda’s makeshift leadership is announcing these cuts with just seven weeks to go before the big day, in the most crucial period for any retailer, shows just how desperate its situation is right now.

Rose stepped in to try to steady the ship after co-owner Mohsin Issa, with echoes of the depressing situation in the US, was belatedly persuaded to step aside from the day-to-day running of the show. Now he is putting his plans into place to try to get Asda back on its feet.

Rose says Asda’s shake-up is necessary to bring the supermarket into line with its rivals, while helping to focus its investment in improving its stores.

The move, it says, will lead to less duplication of roles and fewer management positions.

“We have rightly taken the decision to invest in our stores, focus on improved availability, enhanced customer experience, alongside a stronger trade plan.

“We must now deliver a more flexible and fast-moving home office structure to support those priorities.”

Sadly, head office culls have become all too familiar across the supermarket industry in recent years. Asda is certainly not the exception, but it will surely heighten the anger of staff impacted if they think they are paying the cost of Asda’s overdue efforts to concentrate on its in-store offer.

Of course, Asda must prioritise stores and service if it is to succeed in turning its troubles around.

Indeed, the £30m reset of stores announced in July – when it first admitted that service and availability were not up to scratch – always looked as if it would have to be the beginning of a wider investment.

But it never looks great, even for a respected industry figure like Rose, to be seen as paying for customer improvements at the expense of staff.

And while Asda is likely to spend time on Friday, when it publishes its Q3 results, talking about market share and other management priorities, it must also ensure that building and maintaining good staff morale is firmly pencilled in as part of the turnaround plan. 

After all, team spirit – like availability and service (with which it is so closely linked) – is a key ingredient for any supermarket. It’s certainly as important as any investment in new IT.