Retail-to-property empire Co-operative Group is cutting 600 jobs at its headquarters in Manchester in a bid to save £50m a year.
Co-op is a conglomerate of individual businesses
The group cited a disappointing financial performance during 2004 when sales and profits both suffered.
During 2004 group sales fell to £7.8bn from £8.1bn and profits fell to £243.7m, down from £327.3m.
Consequently, it has carried out a review of its head office functions and costs in order to save money.
Over the years, Co-op has evolved into a conglomerate of separate businesses, often with their own individual support structures, the company explained.
Co-op claims each part of its empire has "failed to fully exploit the combined strengths of the group", so streamlining at its head office is needed.
"This is deeply regrettable," said chief executive Martin Beaumont, "but we find ourselves in an unsustainable position."
Union representatives from the National Association of Co-operative Officials ( NACO) and from Usdaw will be consulted over the job cuts early next week.
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.