Kroger will lay off fewer than 1,000 corporate employees as part of an effort to simplify the organization and shift resources closer to customers. Interim CEO Ron Sargent indicated the move targets corporate functions and will not affect store, distribution center, or manufacturing staff. Savings from the corporate reductions will be reinvested to fund new store locations, create store-level jobs, and enable price cuts for customers. The company has faced additional setbacks over the past year, including store closures and a high-profile, $25 billion merger with Albertsons that was blocked by a federal judge on anti-competition grounds.
In the memo sent to employees, Sargent revealed that "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." The results of this are layoffs, which Reuters says will not affect employees in the company's stores, distribution centers, or manufacturing facilities. The memo went on to say that the savings from the corporate layoffs would be reinvested in the company and used to help fund new locations, create store-level jobs, and offer price reductions to customers.
Within that timeframe, the company has incurred significant setbacks. The most dramatic of those is the failed merger between Kroger and Albertsons, which was valued at $25 billion. The merger would have seen the two grocery store chain giants join ranks, creating a new supermarket juggernaut. This would have allowed the newly formed company to compete against grocery offerings from arch-rivals Walmart and Amazon. However, in December, a federal judge blocked the merger on anti-competition fears.
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