Family owned supermarket group Jumbo is paring down its managerial layer by nearly a quarter despite the boost to profits because of the coronavirus crisis, the Financieele Dagblad reports.

Some 300 of the 1,300 jobs at the group’s headquarters in Veghel are to be scrapped. Of those, 180 are administrative functions which will be outsourced to other companies, which will also take on Jumbo’s original staff. Some 40 jobs at management level will go due to people leaving of their own accord and 80 other staff will be fired.

Finance chief Ton van Veen said that the reorganisation had been announced in January and could no longer be postponed because it would cause unrest among staff. The company did devise a more generous social plan, the paper said, with a two month paid period for training and job seeking and more severance pay.

The extension of Jumbo’s business interests through takeovers, new Jumbo shops in Belgium and broader online activity had created multiple managerial layers which made the organisation ‘slow’, Van Veen said.

‘It took longer to introduce new products and technological innovations. (..) A headquarters must serve customers, shops and distribution centres and not become a separate bastion, the CFO said.

In addition, corona virus may be boosting profits but the shift in spending patterns is having an impact. Online retail sales rose 50% compared to 15% for shop revenue.

‘That is a good result but it’s a shift that is putting pressure on profits,’ he told the paper. ‘Margins are much smaller compared to those generated by physical shops and that makes the need for a more agile headquarters even more important.’