According to the GMB, Asda is preparing to cut up to 1,200 warehouse jobs as part of an aggressive cost-cutting program, marking a second wave of planned redundancies in just over two weeks.
Union officials claim the supermarket is planning to outsource distribution of its George clothing range to DHL, putting hundreds of jobs at several Asda clothing depots at risk. The work is expected to be consolidated into a single DHL-operated facility in Derby.
Locations affected are believed to include Lymedale, North East Clothing and Brackmills, although the depots themselves are expected to remain open. The move follows revelations last week that more than 150 jobs were at risk after Asda suffered a sharp fall in Christmas trading.
GMB national officer Nadine Houghton said the impact on families and communities was severe.
“There are 14 couples with children living in the Lymedale depot alone whose entire household income depends on working there,” she said. “GMB is clear: private equity’s takeover of Asda was a disaster for workers, customers, the supply chain and communities.
“The recently announced job cuts and the outsourcing of clothing sales pave the way for a complete demerger of the company.”
Asda is under intense pressure to rein in costs after its share of the UK grocery market fell to a new low of 11.4 percent over the holidays. Sales fell 4.2 percent year-on-year in the 12 weeks ended December 28. This makes Asda the only major supermarket to record a decline over Christmas, recording its 22nd consecutive month of falling sales.
The turmoil reflects the scale of the challenge faced by Allan Leighton, who returned to the company in November 2024 to oversee the turnaround. Leighton has warned that a full recovery could take up to five years, although he said in May there were “green shoots” for improvement.
Despite promising to undercut rivals such as Tesco and Sainsbury’s in a renewed price war, Asda’s market share has continued to fall, from 12.6 per cent when Leighton took over to 11.4 per cent today. This compares to a 14.4 percent stake in 2021, when the company was acquired by TDR Capital along with billionaire brothers Mohsin Issa and Zuber Issa in a £6.8 billion deal.
TDR has been looking at ways to restructure the group, including spinning off businesses such as George and Asda Express, its convenience store property. The latest outsourcing move is seen by unions as part of this broader strategy.
The financial markets also reacted nervously to Asda’s difficulties. A €1.3bn (£1.1bn) term loan issued by parent company Bellis Finco in 2024 has fallen to a record low of 88 cents per euro after reaching near par value early last year.
Despite the supermarket’s difficulties, filings at Companies House show TDR’s 17 partners made a profit of £31.3 million in the year to April, a point echoed by union leaders.
“The livelihoods of hardworking families and working-class communities should not be jeopardized by the business decisions of a handful of private equity executives,” Houghton said. “It’s time for TDR Capital to speak plainly and be honest about their plan for the business. They owe it to every single Asda employee.”
Asda has been contacted for comment.
