Stock market reacts positively to Sobeys executive cuts
Sobeys’ parent company saw its stock gain ground on light trading Oct. 11 as investors reacted positively to the Nova Scotia-based national grocers’ first round of corporate layoffs.
Empire Company stock was up 41 cents, or 1.88 per cent, to $22.25 at 2 p.m. Atlantic Time from the Oct. 10 closing price of $21.84.
The bump up in the company’s stock came the day after Sobeys announced it was cutting 75 executive positions at its offices across the country, including 14 in Pictou County and three in Dartmouth.
The much-anticipated move is part of restructuring dubbed Project Sunrise, which is to trim $500 million in annual costs from the Stellarton-based grocer’s books and beef up the bottom line. The restructuring plan was announced in early May, and this is only the first of on-going layoffs expected to continue through to the end of the year.
Staff at Sobeys stores are not to be affected by Project Sunrise, only employees at corporate offices.
“The grocery business is highly competitive and our regionallybased structure slowed us down,” said Michael Medline, Sobeys president and chief executive officer, in a statement. “As we move to a national, functionally-led company we have an aggressive goal to transform our organization and leverage our size and scale.
“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.
Empire, which trades on the Toronto Stock Exchange under the EMP ticker, has a market capitalization of almost $6.04 billion.