America's oldest retail chain Kroger Co plans to eliminate roughly 3,000 corporate positions over the next three years, marking a sweeping workforce reduction as new Chief Executive Officer Greg Foran moves to overhaul the grocer’s management structure.
The cuts represent more than one-third of Kroger’s approximately 8,200 corporate staff, making the restructuring one of the largest corporate employees' reductions in the supermarket chain’s 143-year history.Foran, a former Walmart executive, who joined the retailer in February this year, detailed the turnaround strategy in a memo to employees following a companywide meeting on Monday, October 12. The restructuring comes as America's largest traditional grocer contends with slowing top-line growth, fierce retail competition, and persistent inflationary pressures impacting consumer spending.
The memo outlined plans to eliminate redundant functions across departments while modernizing daily operations.
Kroger is increasingly turning to emerging technologies, including artificial intelligence, to automate workflows and drive efficiencies across its corporate network.
What CEO Greg Foran told employees at townhall
The Cincinnati-based grocery giant announced the layoffs to its employees during an all-company call Monday, October 12. In the memo sent to Kroger employees obtained by the Business Courier, CEO Greg Foran wrote that the company’s transformation will result in the company reducing its corporate workforce across multiple functions by about 3,000 roles.
The moves would take Kroger from having about 8,200 corporate workforce employees to roughly 5,200.“As a company, we have made great progress on many fronts with our customers. We started reducing prices and improving our customer experience in stores and online, and we made investments in simplifying our associates’ lives through technology,” Foran wrote. “Our business is becoming leaner, more focused and more competitive.
We are working to be more agile; more precise in our execution; and deliver benefits to our customers, associates and our shareholders.
”CEO Foran reportedly said that the changes are intended to reduce duplicative work, lower prices and redirect investment toward store employees as the grocer integrates AI into workflows. Kroger expects to start sharing details about the affected roles in the coming months. The reductions will help the company put more resources toward cutting prices, improving shopping experience and investing in frontline employees, Foran wrote in the memo.Foran, who helped turn around Walmart’s US business in the mid- to late 2010s, is implementing Kroger’s biggest price cuts in years, while making service in stores friendlier and faster. The operator of Fred Meyer and Ralphs chains is also taking a more aggressive approach toward supplier negotiations. The company laid off nearly 1,000 corporate employees last year to cut costs.The three-year downsizing marks the latest decisive shift under Foran's leadership as Kroger works to defend its market share against deep-discount rivals and major big-box retailers.
Albertsons wants Kroger to pay $9 billion over failed Kroger deal
Incidentally, the layoffs come at the same time when rival grocery chain Albertsons Cos is demanding that Kroger Co pay more than $9 billion for the collapse of the largest US grocery chain merger in history. Albertsons claims Kroger "willfully breached" its contractual commitments and should pay more than $9.3 billion, including a premium stockholders would have gotten and a $600 million termination fee.