Morrisons has put up to 200 head office jobs at risk as Britain’s fifth-largest supermarket relies more on artificial intelligence and automation to contain costs and shore up a balance sheet still suffering from private equity debt.
The Bradford-based grocer confirmed to staff on Monday that a new round of restructuring would affect around 8 per cent of the workforce at its Hilmore House headquarters, with the cuts spread across all departments. It is the latest and probably most targeted intervention in a broader efficiency offensive that has been running since last year.
A company spokesman said the proposals were part of a longer-term plan to streamline processes, automate manual tasks and “harness the potential of data and artificial intelligence to improve performance”. In plain language: fewer people in the headquarters, more algorithms that do the hard work.
The news, first published under the trading title Better Retailing, comes less than a month after Morrisons confirmed it would lay off its entire convenience buying and operations teams and move its general merchandise staff to a new office more than an hour’s drive away. Around 100 employees were affected by this move.
For Morrisons, a medium-sized company that grew from a market stall in Bradford into a national multiplier with around 500 supermarkets and a collection of convenience stores, the bottleneck is familiar territory. The chain has been struggling since Clayton Dubilier & Rice, the American private equity group, took it private in 2021 in a deal that piled £6.6 billion of debt on its balance sheet.
The numbers remain sobering. Morrisons posted a statutory loss before tax of £381m in its last financial year, a slight improvement on its loss of £414m the previous year. Net debt has been reduced by 46 percent to 3.17 billion pounds since 2022, mainly through redundancies and the disposal of selected stores and petrol stations.
The cost reduction program also shows measurable results. The group said last month that it had reduced its cost base by a further £49m in the most recent quarter, bringing total savings since the program began to £894m. Retail also developed well, with like-for-like sales increasing by 2.8 percent in the three months to the end of January.
Nevertheless, the board has no illusions about the way forward. The company warned that the trading environment remained “highly competitive and growth in the grocery market was falling short of previous expectations” and that first quarter conditions had continued into the second quarter.
Chief Executive Rami Baitiéh said he was closely monitoring the impact of the war in Iran on consumer confidence and had repeatedly pointed to the burden of the fall 2024 budget and broader government legislation, which he said had created “significant cost headwinds” for operators across the sector.
In a statement released on Tuesday, a Morrisons spokesman said the “multi-year program will ensure our core functions are better able to serve our stores and strengthen our ability to serve customers in the current very difficult market conditions.” He added: “As we continue to evolve and adapt, we are proposing to make some changes in a number of areas within our central structure. This will require making some difficult but necessary decisions which will impact colleagues in our head office, where we are proposing to place a number of roles at risk of redundancy.”
The grocer said it would do its best to redeploy affected employees and help them “find alternative roles elsewhere in the company wherever we can.”
For the wider SME supplier base that relies on Morrisons’ shopping counters, the restructure raises a tougher question: how long before the same logic is applied to the conversations that small suppliers have traditionally had with a human shopper on the other end of the line, with the AI at Hilmore House taking over the load?
