In the News

Delayering at Tesco aims for Cost and Customer Service Benefits

Penny Brooks

3rd March 2017

More organisational change at Tesco as Dave Lewis and his team continue the turnaround strategy to improve the competitiveness of the business.

This is a great example of a business flattening its organisation structure in order to cut costs, but also help improve customer service.

Tesco is replacing 1,700 deputy managers with 3,300 lower-paid staff in its Express convenience stores. They say the new staff will be 'shift leaders', which will help to get more staff out on the shop floor in order to improve the level of service they offer their customers, in this desperately competitive market.

It is notable that they expect that their costs will be reduced in spite of the need to make redundancy payments to those Deputy Managers who don't opt either to take the new shift-leader roles or to be redeployed elsewhere in the business.

It's not only happening at Tesco. Waitrose also said recently that it would cut costs by shutting six stores and also removing a layer of management, cutting 700 jobs in the process, along with the removal of 180 department manager posts in its 350 stores.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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