A/S Business Homework for Monday 5th December

Struggling supermarket Morrisons is delayering its management structure, resulting in the loss of 2,600 jobs.

The company is removing a level of management in stores, resulting in increased responsibilities for duty managers.

The company said that, in total, 14,000 Morrisons workers will be affected by the restructuring.

The company, which was a late arrival to the convenience store sector and is attempting to make up for lost time, said it would hire 1,000 staff for its M local convenience stores, while it would also be taking on 3,000 new shop floor staff for the supermarkets, with the new jobs being offered first to those under the threat of redundancy.

Dalton Philips, the chief executive said: "This is the right time to modernise the way our stores are managed. These changes will improve our focus on customers and lead to simpler, smarter ways of working.”

Morrisons has been suffering more than most in the supermarket wars, as shoppers defect in droves to the hard discounters, such as Aldi and Lidl.

Earlier on Tuesday, the effect of the discounters on prices was amply demonstrated as the inflation rate fell to 1.5% in May, its lowest level in almost five years.

Food and non-alcoholic drinks prices were actually down year-on-year, falling 0.6%, as the big four supermarkets (Tesco, Sainsbury’s, Asda and Morrisons) attempt to shore up their market shares with price cuts.

Evaluate the possible impact on Morrisons of the decision to delayer a level of in store management. [20]