Kroger CEO’s promise after bombshell announcement and axing 1,000 jobs

THE top boss of Kroger has vowed to make two key improvements for shoppers amid a bombshell announcement.

As the grocery giant plots to slash nearly 1,000 workers, the CEO promised that the money saved will go towards bumping up the shopping experience for consumers.

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A memo has been leaked from inside Kroger revealing that almost 1,000 workers will be laid off[/caption]

Kroger

A leaked memo from Kroger on Tuesday revealed that the grocer has plans to lay off hundreds of employees, with a little less than 1,000 workers to be impacted, a source familiar with the matter told Reuters.

Corporate associates are the target of the reductions rather than in-store staff or those working in manufacturing facilities or distribution centers, per the source.

“In the past few months, we have all looked for ways to simplify the organization, shift resources closer to our customers, and focus on work that creates the most value,” Kroger’s interim CEO Ron Sargent said in the memo.

“These decisions are never easy, but we know thoughtful, yet difficult, choices are necessary to set our organization up for continued success.”

While the mass layoffs are devastating for the impacted employees, they will have positive implications for Kroger customers.

The company, which has employed more than 409,000 people since February, plans to reinvest the savings into other areas, including lowering grocery prices and opening up new stores, per the memo.

The money will also be allocated towards creating store-level jobs.

MONEY MOVES

The staff reduction is the latest in a series of cost-cutting tactics implemented by Kroger.

The company announced in June its intention to shutter roughly 60 underperforming stores across the next 18 months.

Kroger, which operates more than 2,700 locations across over a dozen banners, did not reveal which banners or stores would be impacted.

A Grocery Dive analysis of WARN notices, union announcements, and local news reports, however, has determined 39 locations that the retailer slated for closure this year.

At least 18 of these spots have already closed, with states such as California, Texas, Indiana, Virginia, and Georgia seeing Kroger closures this summer.

Over a third of the 39 Kroger stores at risk fall under the Kroger name banner.

The company is also plotting to close a number of stores under its Harris Teeter, Pick ’n Save, Fred Meyer, and Mariano’s banners. 

It is unclear whether the shutdowns outlined by Grocery Dive are related to the 60 stores that Kroger announced in June.

The company CEO previously told investors that Kroger is working to axe underperforming stores and shift its focus towards locations that produce the highest value.

“We are reviewing our non-core assets and we’re aggressively looking for ways to reduce costs throughout the company,” he said.

While Kroger is shutting a number of stores, the company is also planning to complete 30 store projects, which include new stores and major renovations, by the end of 2025.

GROCERY GRIPES

These budget-weary moves come in the wake of a failed merger between Kroger and Albertsons.

The two grocery giants had proposed a $25 billion merger, although it was ultimately blocked by a judge at the end of last year, prompting a legal battle between Kroger and Albertsons.

“With the Kroger-Albertsons merger off the table, Kroger is moving to reset its cost base and streamline operations,” Arun Sundaram, analyst at CFRA Research, told Reuters.

“Many decisions were put on hold during the merger process, so it makes sense that we’re seeing more major business decisions in recent months,” he added.

The U.S. Sun reached out to Kroger for comment but has yet to hear back.

Kroger shoppers feel as if the company is “punishing the public over a self-inflicted wound” as a new self-checkout law promises to fight a major threat.

Meanwhile, Walmart and Kroger are facing backlash over a controversial shelf switch – and shoppers are bracing for sticker shock.