As part of a global cost-cutting programme, German-owned discount chain Aldi plans to eliminate several hundred central positions at its UK business by centralising local workflows and outsourcing some functions. The move comes as the company faces slowing growth and tougher competition in the United Kingdom.
Which areas are affected?
The Guardian reports that Aldi is negotiating cuts in its IT division that could remove up to 150 jobs. Earlier, the company cut 103 roles in finance and administration, and around twenty procurement directors were also let go. Store-level staff are not directly affected, but several highly paid regional management positions have already been removed and similar consultations are expected soon in payroll.
At the company’s Warwickshire headquarters even the hours of agency cleaners were reduced, highlighting the scale of the cost savings drive.
Outsourcing and technology partners
Aldi is outsourcing a number of finance, procurement and administration roles to India under an agreement with Genpact, a firm that provides business process services and enterprise AI integration. The company says increased centralisation and outsourcing will allow it to serve countries with fewer local employees by standardising international operations.
Reactions and company rationale
One affected employee described the decision as short-sighted and said it showed senior management had lost touch with reality. Aldi’s spokesperson defended the reorganisation, saying continuous review of international operations and capturing global scale efficiencies are necessary to keep prices “unbeatable” for customers. The company added that changes will be implemented gradually following appropriate consultations and that it will provide support to those affected.
Aldi also highlighted that it has spent £300 million so far this year reducing prices on 900 products in the UK.
Market context
The cuts reflect broader challenges for Aldi in the UK. Industry data cited by the report show that over a recent twelve-week period Aldi’s sales grew by just 0.4 percent, while its market share fell by 0.1 percentage point year-on-year. Although the chain reduced unit prices on average by 0.1 percent, traditional supermarkets are increasingly competitive on staple food prices and offer a much wider product range.
Similar moves across British retail
Aldi’s steps mirror wider trends in the British retail sector this year. Morrisons and Sainsbury’s announced hundreds of central job cuts in the spring, Tesco also reduced a similar number of roles as it restructured its bakery operations, and Asda warned in the summer that automation in logistics could put up to a thousand jobs at risk.
Implications
Centralisation and outsourcing may deliver near-term cost savings for Aldi, but the company’s position in the UK will depend on how well it can preserve its pricing advantage and service levels while adapting to local market demands. Aldi says the restructuring is intended to increase the efficiency of its international operations so it can continue to offer low prices amid slowing UK growth and intensifying competition.
