With reference to the announcement made on 8th January regarding the changes faced by many Tesco employees, the following are answers to questions that have already been raised.
Please bare in mind that Q & A’s have not yet been printed and distributed to Stores, DC’s and Offices. However, the following are official answers from the Executive Team to the most common questions asked and will, in all likelihood, be edited in order to abbreviate the main points prior to their distribution.
Hopefully this will be of some use to you.
Are you closing the Defined Benefit Pension Scheme to everyone?
Yes we are. What that means is that we will be consulting on closing the Pension Scheme to everyone. What that means in practice is that people in the Final Salary Scheme and the Pension Builder will come out of that Scheme and go into a new Scheme that will be put in place in the future.
What happens to the Pension that I’ve already built up?
Basically, you continue to be entitled to the Pension you built up, so there is no change. What you built up you will get.
So, what happens next with my Pension?
We appreciate that the Pension Scheme is an important part of our colleagues’ reward package. We are going to look at putting in place a very competitive Defined Contribution Pension Scheme. We will be consulting with all our colleagues. What that means in practice is we will write to them individually to their home address explaining what that really looks like and we will give them further details as we progress.
We’ve heard about a Flat Investment in Pay. What does that mean?
Clearly we are facing some financial challenges. We can’t afford to increase our costs. So what this means in practice is there won’t be an improvement in pay rates this year. However, we will be looking at giving more flexible choice to our colleagues in the benefits they receive and of course, we’ll be listening to colleagues to understand what they really want on what works for them.
Can you tell me about the Turnaround Bonus?
Whilst we talked about pay rates remaining flat this year, we are looking at a new Bonus Scheme for all our colleagues, which will reward us if we meet the turnaround (targets).
What will the new Store Structure look like and what is the rationale behind the changes being made?
The rationale was that we had the current structure for over a decade and that it’s served us really well. The customers have changed and we need to change our management structures. The new structures enable the managers to be closer to their own departments, working closer with their colleagues and serving the customers on their own departments.
Is this new Store Structure just a ‘code’ for job losses?
It’s absolutely not a code. In fact, at total level, the head count won’t change and we will continue to invest in colleagues within stores the same way we have in the last few months. It does mean a change to the roles. All of our colleagues will have those changes discussed with them individually over the next few weeks.
March feels like a long time to wait, when can you tell me whether I’m affected?
March is a long time to wait and it is understandable why many of our managers are feeling uncertain about the changes. We will begin conversations by the middle of February and all of the colleagues affected, and all of those not affected, will be clear on what’s happening to them by 1st March.
When will you be able to tell us which stores will be closing?
Closing stores is never a decision that we take lightly. Over the next few weeks we will be finalizing that list and will be having individual conversations with those Store Teams all of which we will be hoping to do by 1st March.
In Offices, will our functions change or will they just get smaller?
We are in a very difficult financial place, so the reality is that in H.O there will be fewer colleagues. However, the really important thing is that we look at what the customers need and make sure that the work that we are doing in the office serves those needs, but also supports the stores looking after them. One of the benefits of the move that we’re making by consolidating our offices in Hertfordshire, is that we’re likely to have more opportunity to work together serving the stores so work becomes more interesting and more collaborative.
With the Cheshunt Office closing, what does it mean for other offices?
We have 32 offices across the UK. We need to look at all of them and the purpose they serve and to make decisions, which means that we can serve the stores more cheaply. We need to bring work together in a way that better enables us to collaborate and work together on the things that matter to customers.
How will the decisions about making a 30% office cost reduction be made?
We know that we have to save 30%. We want to make it a collaborative process, which means that we will start at the top. Following the announced changes to the Executive Team, the new Executive Team will work with their immediate Leaders on the shape of the layer below, then working through the organization in a similar manner. Through this, there will be an opportunity for colleagues to take part in 1-2-1 conversations about the shape of the organization and how it affects them as individuals.
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