British supermarket giant Asda to outsource IT staff to TCS
LEEDS, ENGLAND — British supermarket and petrol station chain Asda recently announced its plans to outsource over 100 IT roles to Tata Consultancy Services (TCS), an India-based IT services and consulting company.
The move, revealed in an email to staff last week, affects more than 5,000 workers at Asda’s Leeds headquarters.
TDR Capital tightens grip on Asda
The outsourcing proposal was disclosed just 24 hours before TDR Capital, a private equity firm, took majority control of Asda by acquiring Zuber Issa’s 22.5% stake.
This acquisition has solidified TDR’s control over the supermarket chain, with the Issa brothers ceding their majority stake.
Outsourcing plan raises job security concerns
More than 130 employees entered a consultation process regarding the outsourcing plan. Asda has not ruled out the possibility of redundancies, further fueling fears among staff.
Nadine Houghton, national officer for the GMB trade union, criticized the move, stating, “The outsourcing and offshoring of jobs from Asda’s head office is yet more asset stripping by TDR Capital. The GMB believes this first round of job cuts is only the tip of the iceberg.”
Asda’s IT transformation initiative “Project Future”
Asda’s spokesperson explained that the outsourcing is part of a broader IT transformation initiative known as Project Future.
The project aims to separate Asda from Walmart’s legacy systems and enhance the company’s data capabilities, customer experience, and competitive edge.
“Project Future will deliver a step-change in our data capabilities, our customer experience, and competitive edge. Put simply, it is a key building block of our strategy that will set Asda up for long-term success,” the spokesperson said.
Previous IT issues and market challenges
The announcement comes amid ongoing issues with Asda’s IT systems, including a payroll error earlier this year that left thousands of employees with incorrect payments.
Asda has also been struggling to improve its market share, which has declined from 14.4% three years ago to 13.1% currently.
Additionally, the supermarket chain is in the process of identifying a successor for Mohsin Issa, who has been overseeing operations since 2021.
Asda’s management is under pressure to address these challenges while navigating the transition to TCS.
The new chief executive could receive a pay package of up to £10 million (US$12.7 million), potentially making them the highest-paid supermarket boss in Britain.
