In a significant move aimed at reducing operational costs, Asda has decided to outsource over 100 IT staff to an Indian firm. This decision has stirred concerns among employees and industry experts. The move forms part of a broader cost-cutting initiative under Asda’s private equity owner, TDR Capital.
The outsourcing plan, disclosed in an email to staff, primarily affects IT employees at Asda’s Leeds headquarters. This announcement came shortly after TDR Capital tightened its grip on the retailer by acquiring Zuber Issa’s 22.5% stake. The consultation process currently involves over 130 employees.
Asda has not ruled out the possibility of redundancies. The company has declined to specify whether the jobs will be moved overseas, which adds to the workforce’s uncertainty. The GMB believes this action could lead to further stripping of essential head office functions.
This failed upgrade has exacerbated concerns about Project Future, a three-year IT transformation initiative aimed at building new systems to replace Walmart’s legacy infrastructure.
With rising finance costs, Asda’s market share has dropped from 14.4% three years ago to 13.1% currently. This decline highlights the financial pressure the supermarket is under.
The leadership change underscores the urgency and challenges the supermarket faces in maintaining operational stability and competitive edge amid financial pressures.
Project Future aims to enhance data capabilities, improve customer experience, and strengthen Asda’s competitive edge. It is on track for completion by the end of the year.
She added that employees are increasingly anxious about their future at Asda. The company has opened a collective consultation with those affected and promises support throughout this period.
The decision to outsource over 100 IT staff to an Indian firm marks a pivotal moment for Asda. While aimed at cost-cutting, the move has raised significant concerns among employees and union representatives. As the transition unfolds, the effectiveness of Project Future and the company’s ability to navigate financial pressures will be closely watched. The supermarket’s strategy and leadership choices in the coming months will be crucial in determining its long-term success.
