Nearly 1,000 corporate Kroger employees are being laid off, despite the grocery chain previously saying no job cuts were planned, as the supermarket chain moves ahead with plans to closed 60 stores.
Interim CEO Ron Sargent announced the layoffs on Tuesday, stating that the Cincinnati-based company, which has a workforce of over 400,000, plans to redirect the savings from the layoffs into other initiatives.
According to the memo obtained by Bloomberg News, Kroger will prioritize reducing prices, opening new stores, and adding jobs at the store level.
This decision follows the company’s June announcement that it will close around 60 underperforming stores within 18 months, as well as a February move to cut an unspecified number of positions at three Cincinnati office locations. In the Cincinnati area, about 200 local corporate jobs are expected to be eliminated, a company spokesperson said Tuesday.
"These decisions are never easy, but we know thoughtful, yet difficult, choices are necessary to set our organization up for continued success," Sargent wrote in the recent memo.
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 without affecting future financial outlooks.
The cuts, which exclude roles at stores, manufacturing facilities and distribution centers, are part of a broader effort to streamline operations and refocus organizational priorities. Employees at locations slated for closure will be offered positions at nearby stores.
Analysts also noted that this 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.
Kroger runs nearly 2,800 supermarkets across the U.S., operating under its own name as well as brands such as Ralphs, King Soopers, Fred Meyer and Harris Teeter. The company is currently in the process of selecting a new CEO after its previous CEO, Rodney McMullen, resigned in March amid an internal ethics investigation.
