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New cash-counting machines to replace 689 workers, six months after 165 jobs scrapped at supermarket’s Bradford HQ

Nearly 700 back office staff are to lose their jobs at Morrisons as the UK’s fourth largest supermarket chain cuts costs after last year’s fall in profits.

New cash-counting machines are being installed in stores, meaning that 689 cash office managers and supervisors would no longer be needed, the company said. It added: “The introduction of new technology is an ongoing programme to ensure that Morrisons continues to improve its competitiveness.”

The decision comes six months after 165 jobs were scrapped at the company’s Bradford headquarters when its financial transaction processing service was outsourced to an Indian firm.

A four-week consultation has started with staff; however, it is understood that they are unlikely to be redeployed to other jobs.

The last major round of redundancies by the company was in 2006, when about 2,000 workers were axed as a result of the closure of three depots, in Kent, Bristol and Warrington.

Morrisons has been struggling recently, despite coming through the horsemeat scandal unscathed, thanks to its integrated supply chain.

The lack of an online groceries operation and its limited number of convenience stores – the two biggest growth areas in food sales – mean the company is lagging behind competitors.

The most recent data by analysts at Kantar Worldpanel revealed Morrisons’ market share fell to 11.7% in March, compared with 12.3% at the same time a year earlier; it was the only major supermarket to suffer a fall.

At its annual results last month, the company reported its first decline in profits for six years – a 7% fall in pretax profits to £879m on sales of £18.1bn. Like-for-like sales were down 2.1% and 400,000 shoppers went elsewhere.

Morrisons is the only big four supermarket yet to launch a groceries website. However, chief executive Dalton Philips said one would start in early 2014 and it was revealed bosses had been in discussions with Ocado.

The market is worth £5.6bn a year and is expected to double within a decade, with rivals at Asda, Sainsbury’s and market leader Tesco all reporting double-digit growth in online sales.

Another double-digit growth area which Morrisons has failed to capitalise in is convenience stores, which has been dominated by Tesco and Sainsbury’s.

Philips said he wants to focus attention on opening about 100 new M Local branches, mainly in London and the south east, where the business is least exposed. Earlier this year the company snapped up 62 former Jessops, Blockbuster and HMV stores from administrators after all three businesses went bust.