Morrisons cut almost 5,000 jobs during its latest financial year as the supermarket pushes ahead with a wider turnaround aimed at controlling costs, strengthening its finances and competing more effectively with rapidly growing rivals such as Aldi and Lidl.
The retailer’s average monthly workforce fell from 101,144 to 96,232 employees in the 12 months to October 2025, representing a reduction of around 5%. Most of the decline came from Morrisons stores, where employee numbers fell by more than 4,200. Manufacturing and distribution operations also recorded lower staffing levels.
Morrisons has stressed that the reduction does not represent a new widespread redundancy programme. Instead, much of the decline resulted from employees leaving the business and their positions not being replaced, alongside specific restructuring measures.
Why Has Morrisons Cut Almost 5,000 Jobs?
The reduction in Morrisons’ workforce forms part of several operational changes introduced as management attempts to make the supermarket more efficient.
According to the company, the decline primarily reflected:
- The closure of its newspaper home-delivery operation
- Restructuring within its retail people team
- A reduction in the size of the Rathbones bakery operation
- Fewer departing store employees being replaced
- Lower staffing levels within manufacturing and distribution
Morrisons said there was no additional redundancy programme across its supermarkets and that store numbers largely fell through natural employee turnover.
The changes come as chief executive Rami Baitieh continues efforts to improve the supermarket’s performance in an intensely competitive UK grocery market.
What Do Morrisons’ Latest Financial Figures Show?
Although Morrisons reduced its workforce, its financial accounts demonstrate why controlling costs remains a priority.
| Financial measure | Latest reported figure |
| Average workforce | 96,232 |
| Previous average workforce | 101,144 |
| Workforce reduction | Around 4,900 |
| Revenue | Around £15.8bn |
| Underlying EBITDA | £835m |
| Pre-tax loss | £926m |
| Market Topco net debt | Around £7.5bn |
Revenue increased to approximately £15.8bn, while underlying earnings from continuing operations remained broadly stable at £835m. However, Morrisons’ parent company Market Topco reported an overall £926m pre-tax loss for the year to 26 October 2025.
The statutory loss was affected by exceptional and non-cash charges, including write-downs associated with the McColl’s convenience business, as well as disruption following a cyberattack affecting a key technology provider.
Why Did Staffing Costs Rise Despite Morrisons Cutting Jobs?
One of the more striking details in the results is that reducing employee numbers did not necessarily translate into lower overall employment costs.
Morrisons’ staffing bill remained under pressure from higher wages, employer National Insurance contributions and other employment-related expenses.
The company has previously said government-related cost increases and wage pressures represented a significant additional financial burden. Reports on its latest accounts indicate that higher National Insurance and wage costs formed part of approximately £200m of additional cost pressures faced during the year.
This illustrates the challenge facing major UK retailers: reducing headcount alone may not be sufficient to offset higher costs per employee.
How Serious Is Morrisons’ Debt Problem?
Debt remains one of the most important issues surrounding Morrisons’ turnaround.
Market Topco’s reported net debt increased to approximately £7.52bn, compared with £7.07bn a year earlier. That wider measure includes significant lease and preference-share liabilities. Lease obligations increased to around £1.97bn.
Morrisons itself also reports narrower debt measures when discussing progress in deleveraging the business, meaning different reports can produce substantially different figures depending on what liabilities are included.
The company has faced greater financial constraints since its acquisition by US private equity group Clayton, Dubilier & Rice (CD&R) in 2021.
Managing debt while finding enough money to invest in stores, pricing, technology and its convenience operation is therefore central to the turnaround.
Is Morrisons Losing Ground to Lidl and Aldi?
Competition is another major reason Morrisons needs its turnaround to succeed.
Lidl Supermarket overtook Morrisons in Great Britain’s grocery market rankings during 2026. Data for the 12 weeks to 17 May showed Lidl reaching a record 8.6% market share, compared with 8.3% for Morrisons.
This pushed Morrisons into sixth position according to that market-share measure.
Morrisons’ difficulties are particularly significant because it was historically one of Britain’s dominant “Big Four” supermarket groups. The continued growth of Aldi supermarket and Lidl has fundamentally altered that competitive landscape.
Morrisons now needs to balance several priorities at the same time:
- Keeping prices competitive
- Improving availability and customer service
- Controlling operating expenses
- Investing in stores and technology
- Expanding profitable convenience operations
- Generating cash to manage debt
- Protecting margins from wage and tax increases
The supermarket nevertheless continues to grow sales. Its like-for-like sales increased by 2.2% in the 13 weeks to 26 April 2026, although growth slowed from the previous quarter amid what Morrisons described as a highly competitive market.
Could More Morrisons Jobs Be at Risk?
The latest workforce figures do not automatically mean another 5,000 redundancies are planned.
Morrisons specifically said that there was no additional redundancy programme in stores and that employee numbers had mainly reduced because people who chose to leave were not replaced.
However, the retailer has been reviewing operations across its business as it seeks greater efficiency.
Morrisons has also announced the closure of a number of loss-making former McColl’s convenience locations, while changes involving automation, technology and central operations could continue to influence its future workforce structure.
Therefore, while the reported decline relates primarily to the year ending October 2025, cost reduction is likely to remain an important part of the broader turnaround.
What Is Morrisons Doing to Raise Cash?
Morrisons has increasingly examined its property estate and other assets as ways of strengthening its balance sheet.
Sale-and-leaseback transactions can provide an immediate cash injection by allowing a company to sell property and then continue operating from the same locations under rental agreements.
However, these arrangements also introduce longer-term lease liabilities.
Morrisons says more than 80% of its supermarket estate remains freehold, despite undertaking some sale-and-leaseback transactions.
Finding the right balance between releasing cash from valuable property and avoiding excessive future rental obligations will therefore be important to its financial strategy.
Is the Morrisons Turnaround Working?
There are signs of progress, but Morrisons still faces significant challenges.
Sales continue to grow, and management has highlighted healthy underlying earnings and operating cash generation. The retailer also reported £835m in underlying EBITDA from continuing operations in its latest annual accounts.
At the same time, the nearly 5,000 decline in average employee numbers, statutory losses, substantial debt obligations and Morrisons’ loss of market position to Lidl show the scale of the challenge.
The Morrisons job cuts turnaround therefore appears to be less about one large redundancy programme and more about a broader effort to operate with a leaner cost base.
For Morrisons, the next stage will be whether those efficiencies can translate into stronger profitability without weakening stores, customer service or its ability to compete on price.
With Lidl and Aldi continuing to expand and larger rivals Tesco Store and Sainsbury’s Supermarket defending their positions aggressively, cutting costs represents only one part of the recovery. Morrisons ultimately needs sustained sales growth, stronger margins and lower financial pressure if its turnaround is to deliver lasting results.
Conclusion
Morrisons’ turnaround is increasingly focused on cutting costs, improving efficiency and strengthening its finances amid intense supermarket competition. The reduction of almost 5,000 jobs reflects restructuring and lower replacement of departing staff rather than a new nationwide redundancy programme.
However, high debt, rising employment costs and pressure from Aldi and Lidl remain major challenges. Morrisons must now convert its operational savings and sales growth into stronger profitability while maintaining competitive prices, store standards and customer service across its UK business.
