Staff were put on redundancy notice this morning and told that up to 720 jobs are to go from its head office at Hilmore House in Bradford. The group currently employs just over 2,300 staff at the site.
At the same time the group is to recruit an extra 5,000 staff in stores as part of a plan to put more staff on the shop floor and have fewer people working in head office functions.
Morrisons said it needs to focus on what matters to customers - making sure that shelves are stacked and providing more staff at the check out.
The group said it is reshaping the way that its business is staffed, investing in new store jobs to deliver better customer service, while also proposing a reduction in head office jobs.
It began a consultation about a simplified management structure this morning.
The group pointed out that the number of head office staff has increased by 50 per cent since 2008.
Chief executive Mr Potts said: “We are focusing on the things that matter to our customers. That means having more of our staff in our stores, improving product availability and helping customers at our checkouts. We believe our customers and our staff will appreciate the improvements.
“To support this, we need a simpler, faster and cost-conscious head office and that requires some tough but necessary decisions.”
Morrisons said staff members whose job is being made redundant will be offered a role in a Morrisons store and some will be redeployed in other parts of the business.
It added that Morrisons employs more than 20,000 people in Yorkshire in its manufacturing, logistics depots and supermarkets and roles become vacant regularly.
It will also offer voluntary redundancy packages and said the consultation will last for at least 45 days.
The redundancies follow the firing of six directors from the 11-strong management team over the past few weeks as Mr Potts radically restructures the business.
Earlier this week the group announced the departure of group trading director Casper Meijer.
It is understood that Mr Potts wants someone in the role who will be based permanently in the UK.
Dutch-born Mr Meijer’s family is based in the Netherlands and he travelled from the UK to the Netherlands on Friday afternoons to see them.
In a statement, Morrisons said: “Casper’s family remain in The Netherlands and he has decided not to commit to living a fuller part of his life in Britain.”
It is understood that Mr Potts wants his executive team to live and shop in the UK on a permanent basis. He also wants staff to live in Yorkshire and is in the process of relocating to the area.
The external search for Mr Meijer’s replacement has started and Andrew Pleasance, who has spent 30 years in the business working closely with the supply base, will take on the role of group trading director on an interim basis.
Mr Potts said: “Casper has played an important role in starting the process of making Morrisons better value-for-money for customers. However, we both believe now is the right time for this crucial role to be taken by an executive who will dedicate all their efforts to living and working here in Britain.”
Mr Meijer’s departure follows last month’s ousting of group customer marketing and digital director Nick Collard, group retail director Martyn Fletcher, group property and strategy director Gordon Mowat, group logistics director Neal Austin and convenience managing director Nigel Robertson.
Mr Potts said he would be constructing a leaner management board “with the aim of simplifying and speeding up the business”.
Roger Owen, the former property director, welcomed the move as “a step in the right direction of getting back to basics - this is the first marker and good on him”.
He told The Yorkshire Post: “The thinning out of senior management is not surprising because under Dalton Philips it became top heavy with too many chiefs and not enough Indians.”
The management team has five remaining members - Mr Potts, chief financial officer Trevor Strain, company secretary Mark Amsden, group corporate services director Martyn Jones and group HR director Emily Lawson.
Morrisons is fighting to reverse falling sales, profits and market share after German discounters moved into the grocer’s northern heartlands as Mr Philips tried to modernise the business.
His five-year reign as chief executive was brought to an abrupt end by chairman Andy Higginson in January.
Mr Potts, a former Tesco executive like Mr Higginson, has been quick to make changes, with one insider describing him as “a force of nature”.
In his first week, Mr Potts launched a campaign to receive customer and staff feedback, announced he would work in a store over Easter and encouraged other head office staff to do the same.
He also purchased Morrisons shares worth more than £1m.
Last month Morrisons announced losses of £792m for the year to February 1.
Like-for-like sales fell six per cent - the worst performance among the big four supermarkets.