Morrisons to axe hundreds of jobs and shuts cafes to relieve debt pressures
Morrisons is planning to axe hundreds of jobs and shut dozens of cafes amid a push to counter debt pressures and rising staff costs.
The supermarket said it was proposing the closure of some cafes, in-store butcher and fish counters as well as smaller convenience stores across its estate, putting 365 workers at risk of redundancy.
Some florists and pharmacies will also be targetted in the cost-cutting drive.
Rami Baitiéh, the Morrisons chief executive, said the changes were a 'necessary part of our plans to renew and reinvigorate Morrisons'.
He added they would allow Morrisons to 'focus our investment into the areas that customers really value and that can play a full part in our growth'.
It comes just days before Morrisons is due to release its latest trading update for the first three months of the financial year.
The company has been battling high debt costs since its takeover by Clayton, Dubilier & Rice (CD&R) for £10bn in 2021. In October 2021, its debt pile had rocketed to £6.2bn.
For years, the high debt levels have meant Morrisons has had to pay out hundreds of millions of pounds in debt interest payments.
In its latest financial year, high debt finance costs meant it recorded a pre-tax loss of around £500m. In the 16 weeks to the end of July alone, it was struck by a £110m debt finance bill.
Morrisons has been racing to slash this debt pile since Mr Baitiéh took the helm in 2023, and last October announced a £331m deal to sell ground leases on 76 supermarkets.
In November, it announced a major restructuring to reduce its debt pile to around £3.8bn.
However, in January, Mr Baitiéh warned that the company was facing fresh headwinds to its turnaround efforts.
He said Rachel Reeves's tax raid would force it to speed up a cost cutting drive, with the National Insurance costing it £85m alone.
Mr Baitiéh said: 'These additional costs in the Budget were unwelcome, unexpected.'
Under the shake-up announced on Monday, Morrisons said it was planning to shut 52 cafes, 18 of its takeaway food stations known as Market Kitchens, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters and four pharmacies.
While the significant majority of staff are expected to be redeployed elsewhere in Morrisons, the company said around 365 workers are at risk of redundancy.
Morrisons said the changes came after a 'wide-ranging review' which flagged areas where the costs were too high for how much customers were using them.
It said the decision to close parts of its stores would help 'mitigate recent significant cost increases'.
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