The retail giant said jobs will be cut through the closure of all of its in-store meat, fish and deli counters.
It also said roles will go as part of plans to imminently close 120 Argos stores, which is part of a strategy to shut 420 standalone Argos branches over the next three-and-a-half years.
Bosses plan to open more Argos outlets within Sainsbury’s superstores and roll out additional Argos collection points in supermarkets and convenience outlets. They hope to find alternative roles for some staff impacted by the shake-up.
The move will reduce the UK Argos standalone store estate to around 100 by March 2024.
Unveiling the group’s latest financial results, chief executive Simon Roberts said the coronavirus crisis had “accelerated a number of shifts in our industry”.
“Investments over recent years in digital and technology have laid the foundations for us to flex and adapt quickly as customers needed to shop differently,” he said.
“Around 19 per cent of our sales were digital this time last year and nearly 40 per cent of our sales are digital today.
“While we are working hard to help feed the nation through the pandemic, we have also spent time thinking about how we deliver for our customers and our shareholders over the longer term. We will put food back at the heart of Sainsbury’s.”
He added: “Over the next three years we will make Argos a simpler, more efficient and more profitable business while still offering customers great convenience and value and improving availability.
“We are talking to colleagues today about where the changes we are announcing in Argos standalone stores and food counters impact their roles.
“We will work really hard to find alternative roles for as many of these colleagues as possible and expect to be able to offer alternative roles for the majority of impacted colleagues.”
Dave Gill, national officer at trade union Usdaw, said: “Sainsbury’s/Argos has briefed us on their plans to restructure the business, which includes the proposed permanent closure of a number of Argos stores and counter services in Sainsbury’s supermarkets that were closed in March, at the beginning of the first lockdown. We will now enter into meaningful consultation to examine the proposals.
“Usdaw is confident of securing redeployment within the business for the vast majority of staff affected.”
Sainsbury’s posted a pre-tax loss of £137 million for the 28 weeks to September 19 as it was impacted by one-off costs associated with Argos store closures. Total retail sales were up 7.1 per cent, excluding fuel, with like-for-like sales up 6.9 per cent.
Freetrade analyst David Kimberley said: “Even prior to the pandemic, investors were looking for more aggressive cost-cutting measures at Sainsbury’s. Like so many other supermarkets, the company has a sprawling set of businesses, many of which operate with extremely tight margins.
“Store closures and integrations at Argos and Sainsbury’s have been on the cards since the group announced its five-year plan over a year ago.”