Kroger lays off 1,000 corporate workers in cost-cutting move

[CHICAGO] Kroger is laying off nearly 1,000 corporate employees as the grocery-store operator moves to trim costs and simplify its business following its failed deal with Albertsons.

The company is making structural changes to its teams across the US, interim chief executive officer Ron Sargent said in a memo to staff on Tuesday (Aug 26).

“These decisions are never easy, but we know thoughtful, yet difficult, choices are necessary to set our organisation up for continued success,” Sargent said in the memo. He added that Kroger will reinvest savings into other areas, such as lowering prices, opening new locations and creating store-level jobs.

Kroger employed over 409,000 staff as of February, according to a filing, with most of them working in stores. The company declined to disclose how many corporate workers it employs.

Sargent said that Kroger is updating its business priorities while halting projects that were not helping its core retail business, without offering further details.

Cincinnati-based Kroger is looking for a new path to growth under Sargent, who stepped in earlier this year after his predecessor, Rodney McMullen, abruptly exited. McMullen resigned following the board’s investigation into his personal conduct. The company has not specified what it found.

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Supermarket operators, including Kroger, have posted healthy sales in recent quarters as cash-strapped consumers prioritise groceries and essential goods while trimming discretionary purchases. Kroger is looking to slim down, however, after its proposed acquisition of rival Albertsons was blocked by the US government.

Executives said in June that it would close about 60 stores over the next 18 months. Separately, filings this week in Washington state show that Kroger is eliminating about 750 store workers at four Fred Meyer locations in the Seattle area. BLOOMBERG