High Street retailer Boots has said it is planning to cut up to 2,250 jobs from its supply chain operations over the next three years.
Boots is building a new automated warehouse in Nottingham which will allow it to replace 17 older sites with smaller lorry-docking facilities.
Boots also announced it was investing money to revamp its smaller pharmacies.
"This is a major step forward in our plans to build a better Boots," said chief executive Richard Baker.
Boots is in the process of merging with drugs distributor and retailer Alliance UniChem, a deal which is set to be completed later this year.
Its shares rose 3% to 735 pence following the announcement.
Store revamp
The company said that the new reforms were "independent of, but complementary to, the proposed merger with Alliance UniChem".
"Our small stores have been underinvested and are important to the communities they serve"
Boots said the three-year timescale for the changes to its supply chain meant that there was a good opportunity to minimise redundancies through natural wastage.
Where possible, the company said, it would seek to redeploy and relocate workers.
The retailer is to spend a total of £250m on its supply chain - including £70m on the new warehouse in Nottingham - and on revamping 700 of its smaller stores.
The investment is being funded by the proceeds from the sale of Boots' non-prescription drug business, Boots Healthcare International, last year.
Existing sites to be replaced
Mr Baker said the investment in the smaller stores was long overdue.
"Our small stores have been underinvested and are important to the communities they serve.
"It is appropriate that we invest in these stores in order to provide the pharmacy-led healthcare role that both we and the government envisage."
Boots said that the changes to its supply chain, plus reforms to its IT systems, should cut its operating costs by about £60m a year by 2010/11.
Unions said they would be talking to Boots about the proposed job losses.
Usdaw national officer Joanne McGuinness said: "Usdaw will now be entering consultations with Boots management to look at the business case behind this proposal to centralise their retail supply chain which could have an impact on the long term job security of our members.
"Our message to our members is not to panic as even if the proposal to centralise the existing supply chain goes ahead there will be no job losses for at least three years."
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