Sobeys to slash 800 office jobs
Grocer says cost-cutting is part of reorganization
The Sobeys grocery business will cut about 800 office jobs across Canada as part of its efforts to create one efficient national organization out of five regional operations, the company announced Friday.
“The future success of Sobeys, and our continued service to over 900 communities across the country, depends on our steadfast commitment to transform our business,” said Michael Medline, who is chief executive of Sobeys and its parent company, Empire Co. Ltd.
Local reports of the news began to emerge late Thursday ahead of an internal announcement to Sobeys staff.
The company confirmed the reports Friday morning.
Sobeys operates about 1,500 stores across the country under the Sobeys, FreshCo, IGA, Safeway Foodland and Thrifty Foods banners.
Sobeys is Canada’s second-largest grocery company, after Loblaw Cos. Ltd., and faces many of the same challenges in the industry: competition from new rivals, higher costs from rising minimum wages in some areas, and techno- logical change.
However, the company has also been struggling for several years with problems arising from its acquisition of Safeway Canada — which gave Sobeys a much bigger presence in Western Canada.
“The first phase of our plan to transform our business, which has been focused on resetting the foundation of Sobeys and creating a new organization structure, is now substantially complete,” Medline said in a statement to the media.
“This will allow us to be more efficient in many ways and to be more agile as we pursue new opportunities to compete and win the loyalty of Canadians.”
Analyst Irene Nattel of RBC Dominion Securities wrote in a note to clients that the elimination of about 20 per cent of the Sobeys office workforce is a “critical step” toward reducing the company’s operating burden — but that she remains cautious.
“In our view … successful and timely implementation of the strategic plan boils down to execution, and the process is unlikely to move forward in a straight line, with the CEO reiterating on the most recent conference call that quarterly performance is likely to ebb and flow as they execute Project Sunrise,” Nattel wrote.