Grocery giant Kroger is in the process of laying off hundreds of employees.
In addition to the familiar Kroger supermarkets, the corporation also owns Harris Teeter, Ralphs and Fred Meyer stores. Altogether, Kroger has 443,000 full- and part-time employees.
It’s unclear exactly how many employees will get their pink slips with this layoff and where they are located within the corporate structure.
The layoffs are part of the company’s “evaluating middle management roles and team structures with an eye toward keeping resources close to the customer,” a store spokeswoman told CNBC.
Kroger is in the midst of a three-year restructuring as its share of the market shrinks to discount grocers and other big national chains including Walmart. Internet food delivery services were also taking a bite out of its profits, leading to its recent acquisition of Home Chef meal kit company. Shares are down 9 percent this year.
The company is also under pressure from labor costs. Kroger employees are unionized while many of its competitors are not. While Whole Foods can simply cut wages or benefits, as it will do for 1,900 part-time workers in January, 2020, Kroger negotiates with the United Food and Commercial Workers union.
“The truth is, Kroger spent $6 billion on stock buybacks in the last three years, instead of focusing on customer service and investing in those who provide that customer service – our Kroger members,” a UFCW spokesperson said in a statement to CNBC. ”… Kroger should know that investing in the people working hard to make their company successful, not shareholders, is what makes grocery stores better, more competitive, and able to attract even more customers.”
Kroger’s Chief Financial Officer Gary Millerchip is more pragmatic. “Our financial results continue to be pressured by inefficient healthcare and pension costs, which some of our competitors do not face,” he told analysts last month in the company’s second quarter call.
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