RETAIL GIANT Tesco is to lay off 140 staff at its headquarters in Dún Laoghaire following its decision to import more goods directly from the UK rather than sourcing them through Irish suppliers.
The British-owned multiple says the restructuring of its Irish head office is the result of changes in its supply structures and the market generally.
Earlier this week The Irish Times revealed the company makes annual profits of about €250 million in the Republic. Profit margins in Ireland are 9.3 per cent, significantly higher than in other parts of the group.
The company last week unveiled a new cost-cutting strategy at its stores near the Border, involving average price reductions of up to 10 per cent, which is aimed at stemming the flow of shoppers heading North.
The strategy, which relies heavily on the importation of cheaper UK brands, has been criticised by Irish suppliers.
At a meeting with staff yesterday, management said all affected staff would be offered the opportunity of redeployment and retraining for jobs elsewhere in Tesco, either in Ireland or abroad. Head office numbers will drop from 440 to 300, a spokesman confirmed. The company is offering to make redundancy payments of five weeks per year of service, but capped at two years in total, The Irish Times understands.
Management said discussions would start immediately with affected staff in relation to the options of redeployment, retraining or redundancy.
In a statement, Tesco said the restructuring was standard commercial practice and focused on delivering an efficient retail business, lower prices and effective service for customers.
It pointed out that Tesco continues to open new stores in Ireland and is expanding in the rest of Europe, Asia and the US.
“There are significant opportunities for staff in these areas, and we do not envisage any compulsory redundancies.”
“All necessary central office functions, including a buying office, will continue in Ireland.”
The reduction in size of the company’s Irish head office reflects the migration of buying and other functions to the UK and the outsourcing of other work to India.
Meanwhile, Fianna Fáil TD Ned O’Keeffe said Tesco should leave Ireland. “What has Tesco offered us since they came over to Ireland?” said Mr O’Keeffe, in a statement issued before the company’s layoffs announcement.
“All we’ve seen is them exploiting Irish suppliers and continually pushing the prices down. They have been seeking price cuts of up to 20 per cent recently from Irish suppliers or else they will simply remove these products from their shelves. That’s disgraceful carry on.”
Mr O’Keeffe claimed Tesco shelves were being filled “to breaking point” with cheaper, British goods rather than higher-quality Irish products. This would have a huge impact on the Irish food production sector and, in the longer term, on Irish diets.