Asda has announced another major round of redundancies, including folding the management of its IPL sourcing and logistics division into the supermarket’s central management function.
The move will also see hundreds of staff who have taken part in its landmark £800m IT upgrade – named Project Future – leave the business.
The Grocer understands staff were called into Asda House today to learn of the shake-up. It comes ahead of Asda’s full year and Q4 results on Friday, which are expected to reveal more troubles facing the retailer.
Asda said the management restructure was aimed at supporting its ‘Formula for Growth’ strategy and would integrate IPL’s leadership teams into the relevant Asda functions, “bringing the business closer to our operations”.
Asda sources stressed the business remained a central part of its plans and that only a small number of IPL colleagues would be leaving.
It has not yet been confirmed which members of IPL’s team are leaving the business.
IPL, which stands for International Procurement & Logistics, was acquired by Asda in 2009. It sources a large variety of products from around the world that appear on Asda shelves, ranging from fresh fruit and vegetables, nuts and dried fruit, house plants and flowers to wines.
Asda said the vast majority of those leaving the business had been involved in Project Future, which was billed as Europe’s biggest systems implementation programme following its uncoupling from US parent Walmart.
Two weeks ago, it emerged Asda had been granted an extension to the timescale for the £800m IT upgrade by Walmart, after it missed a crucial deadline target.
It was reported the changeover was scheduled to be complete by February, while earlier this year industry sources told The Telegraph that Asda could be fined millions if it missed the deadline.
The redundancies also come two weeks after it emerged 10,000 managers had been told they would not receive their expected rewards because of Asda’s poor performance – namely its market share slump from 13.7% to 12.6%. It was also the worst-performing of the major food retailers over Christmas.
An Asda spokesman said: “The majority of our operations have successfully transitioned to new systems as part of Project Future. For many teams the work is done and so it is natural that colleagues leave the project as the specific workstreams they are working on are completed or as their contracts finish.”
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