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Tesco Streamlines Operations, Cuts 1700 Jobs

Tesco announced that it will eliminate 1,700 store and fulfillment center jobs in an effort to streamline operations.

The grocery giant is eliminating the People Manager, Compliance Manager and Customer Experience Manager. It plans to create 900 new roles with responsibilities spanning distribution, stores and fulfillment operations.

“These changes remove complexity and will deliver a simpler, more helpful experience for colleagues and customers. We recognise these are difficult changes to make but they are necessary to ensure our business remains competitive and set up for the future,” Tesco’s UK CEO Matt Davies said in a statement.

The announcement is in line with the company’s transformation plan, which aims to result in £1.5 billion in cost savings by 2020 and to position the company to better compete with rival stores and e-commerce. At the beginning of last year, Tesco closed two distribution centers and simplified the management structure, leading to as many as 1,000 job cuts, as 500 others were created under the changes. Then in June, the company cut 1,100 jobs when it consolidated its customer service operations into one customer engagement center down from two. As a part of the change, the company added 250 jobs to the second location.

“The retail sector is facing unprecedented challenges and we must ensure we run our business in a sustainable and cost-effective way, while meeting the changing needs of our customers,” Davies said at the time

In the midst of the company’s transformation changes, over the summer the grocer announced it will increase hourly store employee’s wages by 10.5% over the next two years, taking them from £7.62 to £8.42 by November 2018. Additionally, the retailer rolled out a new maternity leave package in October that provides half pay for an additional 14 weeks.

During Tesco’s most recent earnings report, the company said same store sales were up .6% during the 19-week period, ending Jan. 6. The uptick was propelled by a 2.2% increase in same store sales in the UK and the Republic of Ireland. The UK also experienced its best sales week ever on a 4 percent increase in fresh food, and the country posted its eight consecutive quarter of growth.