Morrisons could see 2,000 jobs go

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With dismal sales and a plunging share price, Morrisons could be on the cusp of a major jobs redundancy program. Most shop-store staff will likely be spared the axe, but middle management are thought to be targets - potentially big targets. Morrisons is attempting to "streamline" its 500-store operations, which currently has around 25,000 management roles.

How deep could the cuts go?

Vulnerable

One hundred jobs went last month in Morrisons heartland, Yorkshire. The Guardian claims managers overseeing product categories "such as fresh food or non-food across the chain's 500 stores," could be hit, according to some industry sources.

Up to 2,000 posts could be affected. More will be revealed after the company's AGM, today. One significant move is that its chairman Sir Ian Gibson will be quitting, though not until next year, reports The Grocer.

Where's the USP?

Gibson, not to mention other management heads, have faced severe criticism on falling sales (like-for-like sales dived 7.1% in the last quarter). Not least from Morrisons ex property director Roger Owen who has described Morrisons as an adrift supertanker "heading towards an iceberg".

One big problem for Morrisons (and Tesco) is that it has no clearly-defined unique selling proposition (USP). A bruising recession saw many consumers switch to cheaper players like Aldi and Lidl - with so many British households under pressure, there was no shame in defection.

Ironically, Morrisons and Tesco were once genuine discount innovators. But their prices kept rising. Hardly surprising Lidl and Aldi saw their chance; cleverly, both German cheapies made strenuous efforts to attract the middle class.

Too much choice and competition

That left Morrisons and Tesco flailing to offer their own USP. (Asda is still seen as a genuine discounter, in comparison). To make things worse, most town dwellers now have a choice of several supermarkets in their neighbourhood. If you don't have a clear differentiator, you're very exposed.

Morrisons is currently planning to fund £1bn in price cuts during the next three years. To do that it needs to make savings elsewhere, hence the pressure on some job posts. But with so much emphasis on the claimed freshness of Morrisons products, that could bring oversight (or management) issues. So it's complex.

Morrisons told AOL Money that job cut rumours were currently "largely based on speculation".