Morrisons has placed up to 200 head office jobs at risk as Britain’s fifth-largest supermarket leans harder on artificial intelligence and automation to rein in costs and shore up a balance sheet still groaning under private equity debt.
The Bradford-based grocer confirmed to staff on Monday that a fresh round of restructuring would hit roughly 8 per cent of the workforce at its Hilmore House headquarters, with the cuts spread across every department. It is the latest and arguably most pointed intervention yet in a wider efficiency drive 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 “capitalise on the potential of data and artificial intelligence to improve performance”. In plain English, fewer humans in head office, more algorithms doing the heavy lifting.
The news, first reported by trade title Better Retailing, lands less than a month after Morrisons confirmed it would make its entire convenience buying and operations teams redundant and relocate its general merchandise staff to a new office more than an hour’s drive away, a move that affected around 100 employees.
For Morrisons, an SME-built business that grew out of a Bradford market stall to become a national multiple of roughly 500 supermarkets and a clutch of convenience stores, the squeeze is familiar territory. The chain has struggled since Clayton Dubilier & Rice, the American private equity group, took it private in 2021 in a transaction that piled £6.6 billion of debt onto its balance sheet.
The numbers remain sobering. Morrisons posted a statutory pre-tax loss of £381 million in its latest financial year, a modest improvement on the £414 million loss the previous year. Net debt has been cut by 46 per cent to £3.17 billion since 2022, largely through redundancies and the disposal of selected stores and petrol forecourts.
The cost-cutting programme is also delivering measurable results. The group said last month that it had shaved a further £49 million from its cost base in the most recent quarter, taking total savings since the programme began to £894 million. Trading, too, has ticked up, with like-for-like sales in the three months to the end of January rising 2.8 per cent.
Yet the board is under no illusion about the road ahead. The company warned that the trading environment remained “highly competitive, with grocery market growth lagging previous expectations”, and that the conditions seen in the first quarter had persisted into the second.
Chief executive Rami Baitiéh said he was closely watching the impact of the war in Iran on consumer confidence, and has repeatedly flagged the drag from the autumn 2024 Budget and wider government legislation, which he argues have created “significant cost headwinds” for operators across the sector.
In a statement issued on Tuesday, a Morrisons spokesman said the “multi-year programme will ensure our central functions are better placed to serve our stores and strengthen our ability to deliver for customers in the current very challenging market conditions”. He added: “As we evolve and adapt, we are proposing to make some changes to a number of areas within our central structure. This will involve making some tough but necessary decisions, which will impact on 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 what it could to redeploy affected staff, helping them “find alternative roles elsewhere in the business wherever we can”.
For the wider SME supplier base that depends on Morrisons’ buying desks, the restructuring raises a more awkward question: as AI takes the strain inside Hilmore House, how long before the same logic is applied to the conversations small suppliers have traditionally had with a human buyer on the other end of the line?
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Morrisons to axe up to 200 head office jobs as AI drive accelerates