Co-op chief executive Shirine Khoury-Haq is set to step down, as the retail and funeral care giant unveils plans to cut £200 million in costs this year.
Her departure comes as the business grapples with significant losses and a challenging period.
Ms Khoury-Haq, who will leave her post on March 29, did not dismiss the possibility of job losses as part of the extensive cost-cutting measures.
The Co-op has recently contended with the fallout from a costly cyber attack last year and has faced allegations of a “toxic” workplace culture.
Kate Allum, a member-nominated director on the Co-op Group board, will assume the role of interim chief executive.
She will lead the organisation, founded in 1844, while a permanent successor is sought. Ms Allum’s immediate task will be to steer the group back towards growth and pro
The departing chief told the Press Association that it is partly having to cut costs due to higher labour costs and taxes.
“I have always been honest and can never promise that there would not be an impact on jobs,” Ms Khoury-Haq said.
“We will do the right thing for the organisation and we will ensure that if there are any people impacted that we will look to find new roles and treat them respectfully.”
Ms Khoury-Haq’s departure after four years in the top role, and almost seven at the business, comes a month after reports of concerns over the culture at the top of the group.
In February, the Co-op defended its culture and the behaviour of its bosses after reports said senior managers had complained of a “toxic” environment at the retailer.
The grocery and services chain said it does not believe the criticisms “represent the views of our broader leadership and colleagues”.
The BBC reported that a letter, claiming to reflect the views of a large number of senior managers, had been sent to the chair and another member of the Co-op board last month.
The letter raised complaints about a culture of “fear and alienation” with some senior staff members feeling scared to raise concerns about business decisions in front of the company’s management, including Ms Khoury-Haq, according to previous reports.
The company defended its culture and the behaviour of its leadership team at the time.
On Thursday, Shirine Khoury-Haq said: “It has been an honour to lead our Co-op as chief executive.
“Following last year’s cyber attack, the organisation is now ready to deliver on an ambitious strategy of stabilisation and transformation.
“This extends beyond the timeframe I had planned for my CEO tenure and now is the right moment to hand over to leadership that can commit to seeing the strategy through.”
Ms Khoury-Haq led the business through the recovery from the cyber-attack in late April last year, in which hackers accessed and extracted members’ personal data.
Shoppers were faced with empty shelves and issues with payments shortly afterwards caused by the fallout of the incident.
Fresh figures showed that a £107 million hit from the impact of the cyber attack helped drag the company to a loss for the past year.
The Co-op fell to a £126 million underlying pre-tax loss for the year to January 3, compared with a £45 million profit a year earlier.
It added that shopper behaviour also changed following the disruption caused by the attack, with transactions affected throughout the year as a result.
The group said it also faced “layered headwinds” of around £150 million during the year amid an increase in regulatory and labour costs.
Revenues fell by 2.3% to £11 billion for the year after the cyber attack had a £285 million impact on revenues.
It said it “lost trading momentum” as it focused on recovery and has also been impacted by a “contracting convenience market”.