Kroger to cut 3,000 corporate jobs over next 3 years

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Diving brief:

• Kroger plans to cut its workforce by about 3,000 jobs over the next three years, according to a memo from CEO Greg Foran that the grocer shared with Grocery Dive. Decisions regarding the roles involved will be communicated from the coming months, he added.
• Foran wrote that the company has “more layers, more transfers and more overhead than we need.” He also noted in the memo that the company would leverage technology that can improve efficiency and reduce duplicate work.
• The effort is based on goals that Foran outlined earlier this year to lower prices and make Kroger more able to compete with giants like Costco, Walmart and Amazon. “Our business is becoming simpler, more focused and more competitive,” the CEO wrote in the memo. “We are striving to be more agile, more precise in our execution and to deliver benefits to our customers, associates and shareholders. »

Dive overview:

Foran said Kroger has made progress in reducing prices, improving the shopping experience and becoming a leaner organization in recent months. But he said the company’s structure and personnel are still far too complex to allow it to continue making progress on these fronts.

“We have the opportunity to make changes that will create broader roles and faster decision-making,” Foran wrote. “This allows us to bring vital resources closer to the customer to lower prices, invest in our associates and create a better shopping experience.” »

Foran did not provide a specific timeline for the layoffs or indicate which departments within the company would be affected. He said the reductions will allow the grocer to invest more in its associates.

From take over as CEO in February, Foran consistently said Kroger needed to lower prices and offer a more engaging shopping experience in what has become a ruthlessly competitive industry. Recent data shows that the grocer market share has decreased recently, while value-oriented competitors like Walmart, Costco and Aldi have increased their shares.

Kroger told Bloomberg in May that the grocer planned to implement price cuts in all of its stores. The same day this story broke, Walmart announced it had extended its price reductions to more than 7,000 items.

Since Foran’s arrival, the grocer has recently made significant changes to its leadership. In August, the company named former Walmart executive Nate Faust. as the first e-commerce leader. Less than a month later, called on another former Walmart executiveMark Ibbotsen, as store operations manager. Kroger also recently appointed a new human resources director as well as a head of data and AI.

Kroger is also still dealing with rival Albertsons following their failed merger nearly two years ago. Albertsons wants to seek at least $8 billion in damages from Kroger, which Kroger claims Albertsons is not entitled to. The trial is scheduled to begin October 19 in Delaware.