Sobeys starts first round of layoffs
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.