Chiller at Iceland as 400 staff face axe

FROZEN food retailer Iceland is cutting 400 head office jobs, staff have been told. The chain, headed by Malcolm Walker since parent Big Food Group was taken private last month, says the redundancies - equivalent to a third of the Deeside head office - are essential if Iceland is to be returned to profitability.

Walker ran Iceland until January 2001 when he was ousted as chairman in a boardroom coup led by chief executive Bill Grimsey.

Big Food Group was bought for £326m last month by a consortium spearheaded by Nordic investment group Baugur.

The company, which also included cash-and-carry operator Booker, has been broken up and Walker has been brought back to run the frozen food operation. He said: 'Since I left Iceland four years ago, overheads have increased by around £40m.'

He added that annual turnover is £400m lower than it was in 2000, like-for-like sales are down 10% and the business will record a loss for the financial year to March 2005.

'I sincerely regret that the financial situation we have inherited means we will only be able to offer those employees facing redundancy the statutory minimum payments,' Walker told staff.

'This makes a sorry contrast with the substantial severance packages received under their contracts by the former management, who are responsible for the current state of affairs.'