The beleaguered supermarket Tesco has said it will close 43 unprofitable stores across the UK - more than half of which will be local convenience shops, known as Tesco Express.
The firm is also shelving plans to open a further 49 new "very large" stores.
Additionally, Tesco is closing its staff pension scheme, will make cuts of £250m, and reduce overheads by 30%.
Shares in Tesco rose by more than 12% on Thursday, as investors welcomed the company's announcements.
It comes after two years of troubles at Tesco, which has suffered falling sales and profit warnings.
'Facing the reality'
Last year, the company was embroiled in an accounting scandal, and saw the departure of some senior executives.
However the retail giant, which has more than 3,300 stores in the UK, had a better Christmas than expected.
Sales over the holiday period were down just 0.3% on the year before, and up 0.1% if fuel sales are included.
Overall, comparable sales for the three months to the beginning of January were down by 2.9%.
In the previous three months, sales had dropped by 5.4%.
Tesco's chief executive, Dave Lewis, said the firm was "facing the reality of the situation," and was "seeing the benefits of listening to our customers".
Tesco also confirmed that two of its businesses - Tesco Broadband and online entertainment service Blinkbox movies, will be sold to TalkTalk.
It also announced that Matt Davies, the boss of Halfords Group, will take charge of Tesco's operations in the UK and Republic of Ireland from June, and that Trevor Masters will become international chief executive.
Analysis: Kamal Ahmed, BBC business editor
Mr Lewis will want to be cautious. The last place a supermarket wants to be is trapped on the wrong side of a trend when it comes to whether it should be opening or closing stores.
Planning and building supermarkets can take years. With the economy improving and real incomes becoming slightly healthier, some believe that in-store shopping could return.
Store openings are still a vital route to gaining new customers. Aldi and Lidl are opening shops as fast as they can find the sites.
Entertainment service Blinkbox will be among the assets sold by Tesco
Sales at the retail giant improved in the six week Christmas period, with grocery shopping up almost 13% on last year, and online clothing sales growing by more than 50%.
The firmconfirmed it would not be paying a final dividend to shareholders for 2014/15.
"Finally, we are witnessing the beginning of the Tesco fightback," said John Ibbotson, director of retail consultants, Retail Vision.
"Previous management lacked the bottle to do what needed to be done. [Tesco chief executive Dave] Lewis, it would seem, has bottle aplenty. He has taken some tough decisions."
Also among the cost-cutting measures announced on Thursday were plans to close Tesco's longstanding headquarters in Cheshunt, Hertfordshire, and move its main offices to Welwyn Garden City.
The firm also said it was looking to sell Dunnhumby, the data business behind Tesco's Clubcard scheme, although the scheme itself will remain in place.
Stores in Fort William, Aviemore and Crieff in Scotland are among the 49 planned Tesco stores being scrapped, as are supermarkets in Carryduff, County Down and Armagh city centre in Northern Ireland.
In total, the scrapped developments equate to more than two million square feet of retail space.
No details were given on the number of job losses expected, but Mr Lewis said the company would "start at the top and work down".