The Co-operative Group plans to cut 600 jobs at its Manchester headquarters in an attempt to save £50 million a year.
The news follows a disappointing financial performance during 2004 when sales and profits both slumped. In the year, group sales fell to £7.8bn from £8.1bn and profits fell to £243.7m, down from £327.3m.
A review of head office functions and costs has resulted in the announcement.
Each part of the Co-op empire is said to have "failed to fully exploit the combined strengths of the group”. And chief executive, Martin Beaumont, added: "This is deeply regrettable, but, we find ourselves in an unsustainable position."
National Association of Co-operative Officials (NACO) and Usdaw described the news had as a "massive shock".
"We'll be closely examining the business case for these redundancies, which affect about a fifth of the total workforce, to make sure this level of job cuts is really necessary," said Usdaw national officer Sharon Ainsworth.
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