Tesco to announce supplier contract revamp, job cuts: Reports
British supermarket chain Tesco will on Thursday announce drastic changes to supplier contracts and job cuts to help rebuild its reputation after an accounting scandal and four profit warnings last year, the Sunday Times reported.
New chief executive Dave Lewis, who joined the supermarket in September from Unilever, plans to scrap a complicated system of supplier contracts based on rebates and penalty fees, the paper said, citing senior sources.
Incorrectly booking payments from suppliers was at the centre of Tesco's 2014 accounting debacle that led to a 263 million pound overstatement in profits.
Lewis is set to revamp supplier contracts by focusing on sales volumes, with higher sales leading to cuts in supplier prices, the newspaper said.
In Thursday's third-quarter trading update Lewis is also expected to announce deep job cuts at Tesco's headquarters and regional offices, the newspaper added.
Tesco did not respond to requests for comment.