Socialist Worker

How Asda is making workers pay the price of a failing firm

Multinational retailing giant Walmart is slashing 16,000 jobs and its subsidiary Asda is following suit. Nick Clark looks at what’s behind the attacks and how they can be beaten

Issue No. 2488

Inside Asda

Inside Asda (Pic: Elliott Brown/Flickr)


The supermarket giant Asda announced last week that 200 workers at its head office in Leeds face the sack.

Bosses followed this up with news that they would “relocate” or “redeploy” a possible 5,000 workers.

They could axe some 1,000 jobs.

A previous “restructure” just last year saw more than 4,000 jobs affected.

Bosses redeployed workers to lower paid online shopping jobs and some 1,360 jobs were slashed then too.

The latest announcements came as Asda’s US owner Walmart said it would close 269 stores in the US and South America.

This will mean 16,000 workers losing their jobs.

Yet Walmart still posts huge profits. Last year its gross profit was £80 billion.

These profits are based on its notoriously ruthless exploitation of workers.

Only last week Walmart lost a landmark court case over the sacking of workers who struck for higher wages and better terms and conditions.

Workers in the Our Walmart campaign had protested outside the company’s headquarters.

Bosses sacked 16 of them—a move that was ruled unlawful.

In the same week as the court ruling, Walmart announced plans to raise 1.2 million US Walmart workers’ wages.

Unicorn

But unions said, “It’s easier to find a unicorn than a Walmart worker who has gotten a meaningful raise.”

Walmart’s business model of low wages and using its sheer size to undercut rivals is also facing problems.

The programme of closures and job cuts are part of the company’s attempt to deal with its slowing sales growth.

After trying to expand by opening smaller convenience stores, it is now closing them all.

Its British-based subsidiary Asda is having similar problems.

Asda’s attack on workers followed a particularly bad Christmas.

Its sales dropped by 3.5 percent in the 12 weeks leading up to 3 January—more than any other supermarket.

All of the “big four” supermarkets—Asda, Morrisons, Sainsbury’s and Tesco—have suffered from falling sales, profits or both.

They’ve been fighting a “price war”—slashing prices to undercut each other and compete with budget supermarkets Lidl and Aldi.

Paying for this has meant sacking workers and closing outlets to focus on online shopping.

Supermarket bosses across the world have been making workers’ pay the price.

But the fact that Asda has money to spare on cutting prices shows that bosses are not short of cash either.

It’s possible to have low food prices without workers losing out.


Contracts give no security

Alongside plans to slash jobs and relocate staff, bosses also want to close staff canteens in 350 of Asda’s 620 stores.

There are even plans to take away the free tea and toast that workers in 230 of Asda’s stores have in the morning.

This may sound trivial. But in a hard job on low pay, every little helps.

As one worker at an Asda in Milton Keynes put it, “None of us earn huge amounts and little perks make a difference.”

I’ve got two kids and a mortgage and I’m going to be out of a job because I can’t do these hours.

Supermarket workers have got it rough. Of all the supermarkets only Lidl, Aldi and Morrisons pay staff at least the living wage.

And many supermarket jobs are on zero or short hours contracts.

In 2014 it was revealed that some contracts guarantee just three hours a week.

The GMB said that many of the short hours contracts are the result of bosses splitting full time jobs to avoid paying National Insurance.

The effect on workers can be disastrous.

A 2014 study by Cambridge academics Alex Wood and Brendan Burchell found supermarket contracts left workers feeling “anxious and insecure”.

One worker told the study, “I’ve got two kids and a mortgage and I’m going to be out of a job because I can’t do these hours.”


Union’s fight in 2005 showed bosses can be beaten

The workers who took on Asda and won

The workers who took on Asda and won


 

Ten years ago GMB union members fought Asda bosses for union recognition and decent pay—and won.

The campaign saw depot and distribution workers fight it out with management for more than a year.

Distribution workers at the depot in Washington, County Durham, demanded a ten percent pay increase—and voted overwhelmingly to strike for it.

They were also fighting Asda’s plans to axe 315 jobs at the same site.

Meanwhile, workers at Asda’s depot at Wigan, in Lancashire, demonstrated in defence of a their GMB steward.

He was sacked for writing “vote yes” on an England flag attached to his cab during the ballot.

Asda offered the Washington workers the ten percent pay increase, but only if they gave up their collective bargaining rights.

The strikers refused.

An employment tribunal later found that Asda had breached the law forbidding employers to bribe their workers into giving up union rights.

Eventually Asda agreed to give the GMB access to all depots.

The threat of a national five-day strike during the World Cup was key to winning this.

It was a victory against a multinational notorious for union-busting.

And more could have been won if the strike went ahead.

The agreement between Asda and the GMB saw little struggle after that.

But the fight against Asda management ten years ago shows that the supermarket bosses can be beaten.


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