American retailer Kroger is joining competitors in announcing layoffs across its workforce. Kroger is considering corporate restructuring as a means to redirect its resources into other investments and growth opportunities. Hitting the pause button on some non-core projects, Kroger has narrowed its sights on eliminating “fewer than 1,000” of its corporate staff members. While the company also expects to open up new stores and create jobs with the revenue saved from the layoffs, the information does little to comfort the workers who will soon be out of work.
Are the Kroger layoffs unexpected? No, not necessarily. After the Kroger-Albertsons merger took a turn for the worse and evolved into an expensive legal battle between the two parties, many had expected the retailer to turn to other cost-cutting mechanisms to keep the company in the green.
Kroger is conducting layoffs across its corporate workforce, resorting to administrative cuts to clear the way for growth. (Image: Pexels)
Kroger Layoffs Announced: Fewer than 1,000 Employees Expected to Exit from the Workforce
Breakups are hard, but matters grow particularly complex when there are billions of dollars on the table. Kroger and Albertsons were on track to seal a $25 billion merger last year, but the deal was blocked in federal and state courts in December. The two grocery chains soon resorted to legal action against each other, shifting the blame between them and demanding compensation for the failure.
Albertsons’ attempts to collect on a $600 million merger termination fee are now being challenged by Kroger, but it is too soon to remark on which of the two businesses will win this battle. Regardless of the outcome, Kroger employees have been caught in the fray, facing the consequences of Kroger’s reset post-merger.
Partly as a result of the failed merger and partly to keep its own business successful by taking the solo route, Kroger is conducting layoffs across its corporate workforce. It is likely that such decisions were already in the works during talks of a merger, but were then put on hold until there was more clarity on the fate of the deal. Now, the goal appears to center on simplifying the business to keep the focus on core operations while reinvesting the savings into new avenues of growth.
What Do We Know About Kroger’s Administrative Cuts?
“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 told employees in a memo, according to Reuters. Kroger’s latest corporate restructuring marks the third round of layoffs at the company this year.
Kroger did not elaborate on the specifics of the layoff or identify the exact roles that will be affected by the cuts. Reports indicate that of the nearly 1,000 corporate staff who will be affected by Kroger’s administrative cuts, 200 are based in the headquarters in Cincinnati. While posts on LinkedIn have hinted that the Technology and Digital division of the organization felt some of the effects of the Kroger job cuts, there is no evidence to suggest that Kroger is exclusively focusing on tech jobs this time around.
Earlier this year, Kroger cut office jobs in 84.51°, its retail data analytics subsidiary. This was seen as a shocking move by many, as customer insights were considered key to the company’s overall success. Kroger claimed the decision was based on its need to “focus on the key priorities that power [its] go-to-market strategy,” but did not elaborate on how the cuts furthered this goal.
The grocer is on track to close around 60 stores by the end of 2026, with the intention of opening up new locations next year. While this current round of layoffs at Kroger is not expected to affect any in-store or distribution center workers, with store closures ongoing, we expect non-corporate employees will be let go gradually.
Merger Misfortunes Trickle Down to Employees
Mergers are always stressful for employees, regardless of whether they succeed or fail. Paramount recently completed its merger with Skydance, and the organization is also looking at layoffs to reorganize the newly consolidated business. Kroger is stuck in a difficult position following the failed merger, but its employees are the ones truly caught in the crossfire.
The uncertainties surrounding the merger, compounded by the repetitive cycle of layoffs, can leave anyone exhausted and uncertain, and operating under such conditions is inevitably strenuous. During such uncertain times, employees look to their leaders for guidance, but Kroger’s leadership is also wavering.
After CEO Rodney McMullen unexpectedly resigned in March following a board investigation into matters of “personal conduct,” interim CEO Ron Sargent took charge of matters. It is unclear if he will also be replaced with a new leader in the coming months, making it harder for employees to seek stability in their leaders. While some of these factors are an inevitable consequence of running a business, the organization’s response to such changes is key to providing a sense of normalcy for workers.
While the state of the job market makes it unlikely that employees will voluntarily quit in the next few months, employers should consider collaborating with their HR teams to check in on employees and assist with their well-being and productivity more intrinsically. As the Kroger layoffs proceed, its ability to work in tandem with its workforce will determine how the company progresses towards its goals.
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