Tesco UK to cut net 800 jobs in cost-cutting drive

LONDON (Reuters) - Britain's biggest retailer Tesco <TSCO.L> said on Monday it will cut a net 800 jobs from its UK business in its latest move to simplify operations and achieve targeted cost savings.

The supermarket group, the UK's largest private sector employer with a staff of over 310,000, said the role of "people manager" and "compliance manager" will be removed from large UK stores and fulfillment centers, as will the role of "customer experience manager" from 226 stores.

These changes will affect 1,700 Tesco workers who will be offered alternative roles within the business where possible.

Tesco said it would, however, create 900 new roles - "people partners", "learning partners" and "colleague relations partners" - who will work across multiple sites, in distribution, stores and fulfillment. 

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A new "colleague administration role" will also be created to support management teams in each large store and fulfillment center.

Tesco set out a plan in October 2016 to reduce operating costs by 1.5 billion pounds ($2.1 billion) over three years through efficiencies in its distribution network and stores and from procurement savings.

It needs the savings to help achieve its target of a group operating margin of 3.5 percent to 4.0 percent by the 2019-20 financial year, up from 2.3 percent in 2016-17.

"We recognize these are difficult changes to make but they are necessary to ensure our business remains competitive and set up for the future," said Matt Davies, Tesco's UK and Ireland CEO.

Last June, Tesco cut 1,200 jobs at its head office and 1,100 jobs in Cardiff, with the closure of a customer service center. In February it cut 1,700 deputy managers at "Express" convenience stores and in January last year cut a net 500 jobs from its distribution network.

Shares in Tesco, which disappointed with a Christmas trading update earlier this month, were down 0.3 percent at 207.2 pence at 1511 GMT.

($1 = 0.7184 pounds)

(Reporting by James Davey; Editing by Adrian Croft)

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