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Thu 23 Apr 2015 04:11 PM

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Qatar-backed Sainsbury's says to axe 800 UK jobs

British supermarket is aiming to achieve $750m of cost savings over the next 3 years

Qatar-backed Sainsbury's says to axe 800 UK jobs
UK supermarket giant J Sainsbury this week moved closer to opening its company books for due diligence to Delta Two, after the Qatari-backed investment fund offered to increase the equity proportion in its 10.6 billion pound ($21.3 billion) takeover bid.

British supermarket Sainsbury's, which is 25.9 percent owned by Qatar, is to axe 800 store jobs as part of a cost cutting programme designed to free up cash to reinvest in the business.

Sainsbury's said its proposals, which involve the removal of department and deputy managers from some stores as well as some night shift workers, would help achieve some of the £500 million ($750 million) of cost savings targeted for the next three years.

"The proposals will help...fund future investments in areas which really matter to customers, such as service, price and quality," the company said on Thursday.

Sainsbury's, in common with rivals Tesco, Asda and Morrisons, is grappling with food price deflation and an intensifying price war launched to counter fast-growing discounters Aldi and Lidl.

All are having to adapt their businesses as consumers shop more frequently, buy more online and favour local stores rather than out-of-town sites.

In January the 1,200-store Sainsbury's cut 500 jobs at its support centres in London, Manchester and Coventry. In total the group employs about 161,000 people.

Tesco, Asda and Morrisons have all cut jobs over the last year.

Last month Sainsbury's posted a fifth consecutive quarter of declining underlying sales but said measures laid out in November's strategy update were working, enabling it to combat the discounters' threat and any revival from market leader Tesco.

On Wednesday Tesco posted one of the biggest annual losses in British corporate history but the firm's new boss, Dave Lewis, said there were encouraging signs his new trading strategy could deliver a recovery.

Established in 1869 and headquartered in London, Qatar Holding bought a 25.999 percent stake in the retailer in February 2010.

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