Nearly 1,000 corporate employees at US grocery chain Kroger are being laid off, despite the company previously stating no job cuts were planned. The move comes as Kroger prepares to close 60 underperforming stores.
Interim CEO Ron Sargent announced the layoffs on Tuesday, stating that the Cincinnati-based company, which employs over 400,000 people, will redirect savings from the cuts into other initiatives. According to a memo obtained by Bloomberg News, Kroger will prioritise reducing prices, opening new stores, and adding jobs at store level.
The decision follows Kroger's June announcement that it would close around 60 underperforming stores within 18 months. In February, the company also cut an unspecified number of positions at three Cincinnati office locations. Around 200 local corporate jobs are expected to be eliminated in the Cincinnati area, a company spokesperson said.
Kroger's first-quarter earnings report revealed plans to close the stores, resulting in a $100 million impairment charge. The company expects only a modest financial benefit from the closures but said savings will be reinvested to improve customer experience at remaining locations. Employees at stores slated for closure will be offered positions at nearby stores.
Analysts noted that the shift likely follows the collapse of Kroger's proposed $25 billion merger with fellow supermarket chain Albertsons. More than 30 new Kroger store openings are expected by the end of this year, with further expansion in high-growth markets next year.
