Asda has launched consultations with around 5,000 staff over a major restructuring which could put around 3,000 back office store workers at risk.
The supermarket giant said the major restructuring has been driven by the ‘structural shift’ towards online grocery shopping during the pandemic.
The grocery firm said it also plans to create around 4,500 jobs in its online operations this year and will look to hire staff affected by the restructuring.
Roger Burnley, Asda chief executive officer and president, said: ‘The pandemic has accelerated change across the retail sector especially the shift towards grocery home shopping and our priority is to serve customers in the way they want to shop with us.
‘The last 12 months have shown us that businesses have to be prepared to adapt quickly to change and I am incredibly proud of the way we demonstrated our agility and resilience through the pandemic.
‘We know that these proposed changes will be unsettling for colleagues and our priority is to support them during this consultation process.
It is thought Walmart was wooed by the Issas’ entrepreneurial flair and the potential to put Asda convenience stores in EG’s petrol stations
‘Our plans to transform the business will result in more roles being created than those we propose to remove and our absolute aim is to ensure as many colleagues as possible stay with us, as well as creating the opportunity to welcome new people to our business.’
It comes just over a week after billionaire petrol station tycoons the Issa brothers and their private equity backers have completed their £6.8billion acquisition of the supermarket.
The EG Group, owned by Mohsin and Zuber Issa, previously reached an agreement to acquire the chain from Walmart.
The deal, which is being backed by investment funds managed by TDR Capital, will also include its chain of petrol forecourts.
They secured FCA approval for the takeover last week. However, the deal still needs to secure approval by UK competition regulators.
The brothers, who are worth an estimated £3.56bn, sent ripples through the City when they were named as the frontrunners for the takeover last year.
Mohsin Issa, 49, (left) and his brother Zuber, 48, whose parents came to Britain from India ‘with nothing’, built EG Group from one site bought for £150,000 in 2001 into a £9billion giant employing 44,000 staff
The first Asda supermarket, opened in 1965 in Wakefield, West Yorkshire
Asda history: How Britain’s third-largest supermarket began as a Yorkshire family butcher
A newspaper article about one of the first ever Asda stores
1950s: The Asquith family (W.R. Asquith) open a butcher’s shop in Knottingly, West Yorkshire, which was eventually expanded to seven shops.
1958: They travel to the USA to visit Piggly Wiggly, probably the world’s first supermarket.
1963: The Asquiths open the UK’s first self-service supermarket in Wakefield, West Yorkshire.
1965: Peter Asquith built his first new supermarket from scratch, next to a large car park, knowing that cars would change the way people shop. Associated Dairies were employed to run the in-store butchery operation and the name Asda was born by combining ASquith and DAiries.
1966: Asda becomes the first major food store to sell general merchandise.
1968: Associated Dairies buys out the Asquith Brothers.
1999 Asda is bought by Walmart.
2020 (February): Walmart says it is looking for a buyer.
2021 (February): Issa brothers and their private equity backers announce their £6.8 billion acquisition of Asda has now been completed.
The children of immigrants who moved to Blackburn from Gujurat, India, in the 1970s, Mohsin and Zuber now have franchise agreements with brands including Starbucks, Subway and KFC.
The Blackburn-born siblings were recently locked in secret talks to buy Topshop before it became part of the Asos portfolio.
The Issa brothers’ estate includes a £25m Kensington townhouse and a private jet that is kept in a hangar at Blackpool Airport alongside Donald Trump’s personal helicopter.
They are also building five identical mansions just three miles from the £115,000 Blackburn two-up two-down where they were raised. Mohsin is expected to live there with his wife, Shamim with whom he shares two grown-up children.
In a separate announcement today, the Competition and Markets Authority (CMA) said it has set April 20 as a deadline for its preliminary decision on the move.
In October, the suitors announced the deal to buy the majority stake in the UK’s third biggest grocery, although previous owner Asda will still hold a minority stake.
The CMA launched an investigation in December and initially set a February 18 deadline for its Phase One probe, before pushing its timetable back in order to look at additional documentation.
Since the inquiry was launched, the Issa brothers and TDR have confirmed plans to sell Asda’s petrol forecourt business to its own EG Group for £750million.
The CMA will also consider the forecourt deal as part of its inquiries.
The update also comes days after the new owners completed a £2.75billion junk bond sale to help fund the Asda acquisition.
Competition lawyers expect the deal to be given the go-ahead by the regulator.
It comes almost two years after Asda’s attempted merger with rival Sainsbury’s was halted by the CMA.
It is thought Walmart was wooed by the Issas’ entrepreneurial flair and the potential to put Asda convenience stores in EG’s petrol stations.
Walmart is looking to sell most of its stake in Asda to focus on defending its position in the US against Amazon and pursue opportunities in higher growth markets, such as India.