Asda Faces Major Job Cuts After Christmas Sales Slump

Asda, one of the UK’s largest supermarket chains, is facing a critical crossroads after launching redundancy consultations that could see more than 150 jobs cut across its nationwide distribution and logistics operations. The move, announced on January 18, 2026, follows a deeply disappointing Christmas trading period in which Asda became the only major British grocer to report a decline in festive sales—a sobering 4.2% drop in the 12 weeks ending December 28, 2025. This setback reduced Asda’s market share to 11.4%, down sharply from nearly 15% when the company was acquired by the Issa brothers and private equity firm TDR Capital in 2021, according to The Telegraph and other media outlets.

The redundancies—expected to affect more than 80 management positions as well as dozens of warehouse and logistics roles—are part of a wider operational overhaul. Asda’s plans include a major shake-up of its transport and parcel delivery structure, with the creation of eight regional transport control hubs and the outsourcing of parcel operations to delivery company Evri. The company currently processes over 28 million parcels each year, but fewer than half of its 1,200 stores offer next-day parcel collection—a gap Asda aims to close through its expanded partnership with Evri by April 2026, as reported by The Grocer and Evri itself.

"Change is never easy and unfortunately we have had to say goodbye to a number of colleagues," read a memo from Asda bosses to workers, obtained by The Telegraph. The memo explained that the company would be reducing its 30 sub-regions to 22 and that fewer regional managers would be needed to oversee the stores. The company’s spokesperson told The Grocer that the new plans are intended to streamline operations by "reducing duplicated tasks, improving regional flexibility, creating more consistent ways of working, and lowering our reliance on agency and haulier support."

The GMB union, which represents many of the affected employees, has confirmed it is actively supporting its members throughout the consultation process. Nadine Houghton, the union’s national officer for Asda, reassured workers in a message: "Your union will be by your side every step of the way and we will be doing all we can to protect jobs." The union’s involvement includes both collective consultations and individual meetings, focusing on job protection, terms, and outcomes linked to the proposed changes.

Behind the scenes, Asda’s situation is being closely watched by investors and lenders, especially after the company’s debt came under increased scrutiny. Following the 2021 buyout by TDR Capital and the Issa brothers, Asda’s financial position has grown more precarious. The Financial Times reported that Asda’s traded debt has suffered heavy selling since the Christmas downturn, while Retail Gazette noted that the price of a €1.3 billion term loan and €700 million in bonds has dropped, signaling investors now want bigger returns to shoulder the risk. Adding to the pressure, the rating agency Fitch recently downgraded Asda’s credit status to junk, a move that’s expected to further increase borrowing costs.

Executive chairman Allan Leighton, who returned to the role in late 2024, has acknowledged the scale of the challenge. Speaking to The Guardian, Leighton cautioned, "It is going to take us that long to get it right," outlining a three to five-year commitment to turning the business around. Asda has been slashing prices and rolling out promotions in an attempt to halt its decline, but rivals such as Tesco, Sainsbury’s, Aldi, and Lidl have continued to capture market share by offering better promotions and more attractive stock availability.

The proposed restructuring is not limited to parcel operations. Asda is also reviewing its entire transportation structure, with the aim of moving away from a depot-based transport planning model to a more centralized system built around eight regional hubs. This change is designed to improve efficiency in secondary deliveries to stores and reduce reliance on agency support. However, the shift could have a significant impact on jobs, especially in regions like Yorkshire, where logistics personnel are particularly at risk of redundancy.

Despite the sweeping changes, Asda has insisted that depot closures are not anticipated under the current plans. The company has also stressed its commitment to supporting affected employees, promising clear communication and ongoing consultation as decisions are finalized. Consultation periods are expected to last several weeks, and the final number of job cuts has not yet been determined, with negotiations still ongoing and timelines potentially shifting as local site-level discussions progress.

Asda’s current difficulties are compounded by a string of recent setbacks. The retailer has already made cuts to in-store management and IT staff following a problematic IT upgrade, and its market share has been on a steady decline since the 2021 acquisition. Critics have pointed to a failure to stock the range of products wanted by traditional customers and an overreliance on debt-fueled expansion as factors behind the supermarket’s struggles. According to social media commentary highlighted by IBTimes, some observers blame the market intervention that blocked a sale to Sainsbury’s, while others argue that Asda has "lost their way by ignoring the core market and not stocking a range of products that traditional customers want to purchase."

Nevertheless, Asda’s leadership remains focused on the future. The company’s spokesperson emphasized that the changes are intended to "simplify operations and reduce duplication," aligning the business with current trading conditions and restoring competitiveness in a crowded grocery market. With Tesco and Sainsbury’s both reporting sales growth over the Christmas period, Asda faces a tough road ahead as it seeks to reverse its loss of customers and restore sales momentum while managing the human cost of restructuring.

The coming weeks will be crucial as Asda works through its consultation process, balances the need for cost savings with employee concerns, and tries to reassure both customers and investors that it can weather the storm. While depot closures are not on the cards for now, the scale of the proposed changes underscores the seriousness of the challenge facing the UK’s third-largest supermarket chain as it strives to find its footing in a rapidly evolving retail landscape.