The supermarket giant said its new chief executive Dave Lewis will now start work a month earlier than planned on Monday in order to commence a review of "every aspect" of the group's operations.
Tesco said market conditions remained challenging as it cut its forecast for 2014/15 trading profits to between £2.4 billion and £2.5 billion, well below City forecasts and down on the £3.3 billion reported the previous year.
In a blow to many pension funds, Tesco said its half-year dividend for shareholders will be 1.16p per share - a cut of 75% on last year's figure.
It will also slow its store refresh programme in order to cut annual capital expenditure to no more than £2.1 billion - £400 million less than originally planned and a reduction of £600 million on the previous financial year.
Tesco chairman Sir Richard Broadbent said: "The board's priority is to improve the performance of the group. We have taken prudent and decisive action solely to that end."
Mr Lewis, a former Unilever executive, takes over from Philip Clarke, who was ousted last month after the company's latest warning that profits will be "somewhat below expectations".
At the start of 2012, Mr Clarke shocked the market with the group's first profits warning in 20 years. It prompted the launch of a £1 billion turnaround plan but latest annual results showed earnings down for the second year running.
Tesco has been caught in the grips of a price war driven by the growth of discount rivals Aldi and Lidl, and a squeeze on household budgets.
The company said today: "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group."
Tesco shares opened 8% lower following the profits warning, while rivals Sainsbury's and Morrisons were down 5% and 4% respectively.
Earlier this week, industry till-roll figures from Kantar Worldpanel showed that Tesco sales were 4% lower in the 12 weeks to August 17 as its market share slid to 28.8% from 30.2% a year earlier.
Clive Black, a retail analyst at Shore Capital Stockbrokers, believes Mr Lewis will have to step up investment in pricing in order to arrest Tesco's decline.
He added: "We expect, as part of a range of measures, considerable senior management change under Mr Lewis, as Tesco needs a world-class top team to take it forward."