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Morrison to Cut About 2,600 Management Jobs Amid Sales Slump

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June 17 (Bloomberg) -- Wm Morrison Supermarkets Plc plans to cut about 2,600 management jobs as the U.K. grocer seeks to reduce costs amid a slump in sales that caused it to announce 1 billion pounds ($1.7 billion) of price cuts earlier this year.

Department manager and supervisor roles will be pooled together under a smaller tier of team managers, Bradford, England-based Morrison said in a statement today.

The changes will modernize the way outlets are managed with the aim of reducing store management hierarchy and improving customer service, the company said. Some have seven tiers between the shop floor and store manager, it said.

Morrison, the fourth-largest U.K. supermarket chain, has been hit hardest by the expansion of leaner German discount chains Aldi and Lidl, who have lured customers with lower prices and no-frills offerings. Discounters have about 50 percent fewer staff than most British supermarkets, Exane BNP Paribas analyst Andrew Gwynn estimates.

The company is fighting back by cutting prices on products from broccoli to baby wipes, a strategy it said in March would reduce profit by about half this year.

Morrison shares rose 2.8 pence, or 1.5 percent, to 191.1 pence as of 2:10 p.m. in London. They’ve fallen 27 percent this year, headed for a third straight annual decline.

The grocer also said today it’s creating 1,000 jobs in its convenience-store unit and 3,000 positions in new supermarkets. Morrison employs a total of about 126,000 people.

To contact the reporters on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net; Gabi Thesing in London at gthesing@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Paul Jarvis, Thomas Mulier

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