Kroger, the grocery giant that owns Ralphs and Food 4 Less, is laying off nearly 1,000 corporate employees as it continues to restructure its business.
It’s the latest blow for the grocer that operates more than 300 stores in California and is recovering from a failed merger with Albertsons last year. The company is moving to trim costs and simplify its business model, according to an internal memo.
The affected associates are all corporate employees who do not work in stores, manufacturing facilities or distribution centers, 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,” interim Chief Executive Ron Sargent said in the memo.
Kroger employed more than 409,000 people as of February, according to a filing. Most of those employees work in stores.
In June, Kroger announced plans to close 60 locations nationwide. The downsizing came months after a federal judge blocked Kroger’s acquisition of Albertsons.
The company, which also owns Harris Teeter and King Soopers, has faced other headwinds in recent months. Kroger’s former chairman and chief executive, Rodney McMullen, abruptly stepped down in March following a probe into his personal conduct.
Earlier this summer, about 45,000 employees at Kroger and Albertsons authorized a strike to protest what they call unfair labor practices. The employees have not walked off the job.
Based in Cincinnati, Kroger operates more than 2,700 stores under various brands nationwide, offering a wide range of fresh goods, household items and pharmacy services. Experts say the business remains viable despite facing a series of setbacks.
Kroger is under increasing pressure from competitors that offer a wider range of items and convenient one-stop shops. The ambitious Albertsons merger would have given Kroger the scale to compete with Walmart, Amazon and others, but now it must find a path to competing on its own.
In 2022, Kroger agreed to buy Albertsons for $24.6 billion, a sale that would have been the largest supermarket merger in U.S. history.
The Federal Trade Commission, California and several other states sued to stop the merger, arguing that it would hobble competition in many parts of the country, leaving customers at the mercy of a newly formed behemoth and driving up prices. Kroger and Albertsons collectively own about 5,000 grocery stores.
In late 2024, Albertsons scrapped the deal after a federal judge in Oregon issued a preliminary injunction in the case amid concerns that the mega-merger would exacerbate the financial woes of consumers who have struggled with the rising cost of food.
Kroger relies on pharmacy services, advertising and e-commerce for additional revenue, experts said. Although the company grew its e-commerce business 15% in the first quarter of this year, the business remains unprofitable.
Investors seem to have confidence in Kroger’s management’s moves. Its shares are up more than 30% over the last 12 months.
Bloomberg contributed to this report.
