Asda to outsource 100 employees to TCS

The announcement was made 24 hours before private equity company TDR Capital took majority control of Asda by acquiring Zuber Issa’s 22.5 per cent stake

• Shajil Kumar
• 17 June, 2024

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By: Shajil Kumar

RETAIL major Asda is outsourcing more than a hundred employees to Tata Consultancy Services as its new owner looks to cut costs, The Telegraph reports.

The announcement was made 24 hours before private equity company TDR Capital took majority control of Asda by acquiring Zuber Issa’s 22.5 per cent stake.

Those going to be affected are from the company’s Leeds headquarters, where more than 5,000 employees work. More than 130 workers have so far entered the outsourcing consulting process.

Asda declined to comment on whether jobs would be moved overseas and the latest development has sparked fears of job cuts.

The staff were informed through email and the process is expected to begin by September.

GMB trade union official Nadine Houghton has warned that more jobs were at stake.

The Asda announcement has evoked anxious reactions among the employees, with many trying to get in touch with bosses for a clear picture.

The IT department of Asda has been under fire amid a botched systems upgrade that led to thousands of employees being paid incorrectly. Asda is yet to fully resolve this crisis.

The Issa brothers, Zuber and Mohsin, bought Asda with TDR for £6.8 billion in 2021, relying on huge amounts of debt to finance the deal.

Now the supermarket’s balance sheet has been burdened with growing finance costs.

It is also struggling with its market share, which has fallen to 13.1 per cent of the UK’s grocery market, as against 14.4 per cent three years ago.

Asda is reportedly carrying out ‘Project future’ programme, under which it plans to upgrade its data capabilities, customer experience, and shelve many legacy systems.

Tata Consultancy Services had last October won a multi-year contract for the digital transformation of the British supermarket chain.