Sobeys starts first round of lay­offs

The Southern Gazette - - FRONT PAGE - BY JAMES RISDON SALTWIRE NET­WORK

Sobeys is giv­ing the axe to dozens of its ex­ec­u­tives across the coun­try in a much-an­tic­i­pated move by the Nova Sco­tiabased na­tional gro­cer to slash its costs and beef up its bot­tom line.

Four­teen of those jobs are be­ing lost in Pic­tou County, an­other three in Dart­mouth.

“I’m sad­dened by the news,” said Stel­lar­ton Mayor Danny MacGil­livray in an in­ter­view Oct. 10. “It’s a con­cern for sure. I just hope there won’t be any more im­pact lo­cally.”

Al­though Sobeys of­fi­cials would not di­vulge the salary range of the po­si­tions be­ing cut, th­ese were good-pay­ing jobs just be­low that of the com­pany’s vice pres­i­dents.

And it’s clear more cuts are com­ing.

“We do ex­pect to see ad­di­tional col­leagues leav­ing the or­ga­ni­za­tion through the fi­nal stages of the re­struc­tur­ing process in all of our ma­jor cor­po­rate of­fices across the coun­try,” said Jac­quelin Cor­rado, Sobeys’ di­rec­tor of ex­ter­nal com­mu­ni­ca­tions

Most of those other lay­offs are ex­pected to come down be­fore the end of this year, she said.

The job losses are part of a re­struc­tur­ing at Sobeys that is be­ing dubbed Project Sun­rise. It was an­nounced in early May and in­cludes a tar­get of shav­ing $500 mil­lion in an­nual costs from the com­pany’s books by 2020.

“The gro­cery busi­ness is highly com­pet­i­tive and our re­gion­ally based struc­ture slowed us down. As we move to a na­tional, func­tion­ally led com­pany we have an ag­gres­sive goal to trans­form our or­ga­ni­za­tion and lever­age our size and scale,” said Michael Med­line, Sobeys pres­i­dent and chief ex­ec­u­tive of­fi­cer, in a state­ment.

“Change of this mag­ni­tude is not easy on our em­ploy­ees, but we re­main com­mit­ted to mak­ing tough de­ci­sions, and ex­e­cut­ing the nec­es­sary changes, to en­sure our fu­ture suc­cess,” he said.

Ac­cord­ing to Med­line, the fu­ture Sobeys is go­ing to have a sim­pler, leaner struc­ture, be more ef­fi­cient and bet­ter lever­age its $24-bil­lion na­tional scale.

“This will free us up to be ex­tremely nim­ble, grow mar­ket share and thrill our cus­tomers in the more than 1,500 com­mu­ni­ties that we will con­tinue to op­er­ate in,” he said.

Mayor MacGil­livray was try­ing to take some com­fort in Sobeys’ prom­ise that it will con­tinue to op­er­ate in Stel­lar­ton.

“Sobeys is a huge deal for Stel­lar­ton,” said the mayor. “Their head of­fice is in our town and they pro­vide hun­dreds of jobs and this is a com­mu­nity of just over 4,000 peo­ple .... It looks like they’re com­mit­ted to stay­ing in Stel­lar­ton.”

In Septem­ber, the na­tional gro­cer’s par­ent, Em­pire Com­pany, sur­prised in­dus­try watch­ers with bet­ter-than-ex­pected fi­nan­cials for the first quar­ter of its fis­cal year. Af­ter limp­ing along with a lack­lus­tre per­for­mance for six con­sec­u­tive quar­ters, Em­pire re­ported an 18.9-per cent im­prove­ment in its ad­justed net earn­ings for the quar­ter that ended in Au­gust.

In­vestors on the eq­uity mar­kets re­sponded.

Em­pire, which trades on the Toronto Stock Ex­change un­der the EMP ticker, saw its share price spike up­wards by $4.25 to hit $24 on news of those lat­est quar­terly re­sults in mid-Septem­ber. Since then, the com­pany’s share price has soft­ened, slid­ing to $21.91 in late af­ter­noon trad­ing Tues­day.

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