Sobeys hopes layoffs ease problems

After grocery giant Sobeys announced 800 layoffs for office workers across Canada — including 190 in Calgary — a union representing staff who work in dozens of stores said its members are worried about their jobs.

Sobeys, the country’s secondlargest grocery chain next to Loblaw Cos. Ltd., said the office job cuts are part of its efforts to restructure into a leaner, national organization.

“This will allow us to be more efficient in many ways and to be more agile as we pursue new op- portunities to compete and win the loyalty of Canadians,” Michael Medline, CEO of Sobeys and its parent company, Empire Co. Ltd., said in a statement.

As the grocer faces competition from the likes of Amazon and higher costs from rising minimum wages, it also appears to face continued challenges from its acquisition of Safeway Canada, four and a half years after announcing the deal.

Douglas O’Halloran, president of the union representing 6,500 Safeway workers in Alberta, said the chain has struggled to position its stores to fend off competition and maintain customer loyalty.

O’Halloran said the staffing cuts, which will leave 190 Calgary employees out of work, came as a shock. He said his members are worried about their own livelihoods as they prepare to negotiate a new collective agreement with Sobeys after the latest contract expired in March.

“We’re sort of praying that Sobeys will figure out their direction and what they want to do in Alberta, and make Safeway a viable company again,” he said.

Sobeys suffered major growing pains years after its $5.8-billion takeover of Safeway that led to logistical problems, systems in- tegration issues, staff unease and customer complaints about empty shelves, according to the Financial Post.

Mary Moran, chief executive of Calgary Economic Development, said news of 190 layoffs in a city still clawing its way out of recession is disappointing, but she noted the city has added nearly 24,000 jobs in the past year.

Moran said Sobeys appears to be positioning itself to be more competitive as it faces threats from Amazon, which has thrust itself into brick-and-mortar retail with its acquisition of Whole Foods, where it has vowed to slash prices and steal market share.

“From that perspective, I would prefer that they are preparing for the future, rather than being left behind,” Moran said. “Unfortunately, 190 people have to go and figure out what they are going to do next.”

As the local economy reacts to changing market forces, from continued pressure from online retailers to stubbornly low oil prices, Moran expects Alberta’s workforce will be compelled to adapt.

“What’s going to be really important is the speed at which we can retrain some of these people,” she said.

“And that’s what worries me more than anything.”