"In April we said we are taking a more cautious approach to expanding Fresh & Easy, focusing on getting existing stores to profitability," Tesco said in a statement.

"Our central cost base should reflect that more cautious approach. With great regret, this means that we have to make redundancies at Fresh & Easy headquarters in California. This is not with a view to a sale or closure of the business. We remain committed to reach profitability and these changes are about helping to achieve that."

A spokesman for Tesco said about 50 jobs would be lost. Fresh & Easy currently employs just over 5,000 people.

In April Tesco Chief Executive Philip Clarke said he did not expect the chain to break even until its 2013/14 financial year, against a previous target of 2012/13.

Last month Clarke said he was committed to the venture but would pull the plug if it continued to disappoint, and rejected renewed calls for an independent review of its strategy.

Shares in Tesco, down 21 percent over the last year, were up 0.2 percent at 317 pence at 0846 GMT, valuing the business at about 25.2 billion pounds ($39.6 billion). ($1 = 0.6370 British pounds)

(Reporting by James Davey; editing by Rhys Jones)

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