Supermarket titan Tesco has slashed 50 jobs at its US subsidiary, Fresh and Easy, following the decision by Tesco Chief Executive Philip Clarke to limit the number of new store openings at its loss making US arm while it turns its existing stores to a profit.
Fresh & Easy, which employs around 5,200 people, said back in April that it plans to open 230, rather than 300, stores by February of next year. As a result, it expects to break-even 12 months later than expected, in February 2014.
In a statement Tesco said: "In April we said we are taking a more cautious approach to expanding Fresh & Easy, focusing on getting existing stores to profitability. Our central cost base should reflect that more cautious approach.
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"With great regret, this means that we have to make redundancies at Fresh & Easy headquarters in California. This is not with a view to a sale or closure of the business. We remain committed to reach profitability and these changes are about helping to achieve that."
At the annual general meeting Clarke insisted that Tesco remains committed to its operations in the US, but admitted there was no evidence that the company will make a profit there any time soon.
Over the past 12 months the company has improved Fresh & Easy by improving the stores' appearance, opening smaller stores, and bringing in a similar scheme to its Clubcard loyalty points system in the UK.
The share price rose 0.21% to 317.10p by 10:16.
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