Albertsons announces layoffs—are more on the way?Albertsons announces layoffs—are more on the way?

Following a failed merger attempt and an earnings announcement to cut billions in spending, Albertsons has announced layoffs at its corporate and division support offices. The Boise, Idaho-based grocer did not specify a number but stated in a release that they are part of a years-long process to move certain functions overseas.

Biggest news for grocery?

Since the proposed $24.6 billion merger was struck down in Washington and Oregon courts, Albertsons has been wondering about its place in the grocery industry. The grocer stated that the failed deal has put it at a competitive disadvantage and forced it to pivot its strategy to compete with the likes of Walmart and Amazon. During its third-quarter earnings call last week, Albertsons revealed a plan to cut spending by $1.5 billion over the next three years and to leverage investments in technology. The third-quarter results were strong. Albertsons exceeded analyst earnings expectations and reported same-store sales growth of 2% for the quarter, as well as a 23% increase in digital sales, partly due to a 15% rise in loyalty membership.

With billions of spending cuts on the horizon, could this be the first wave of a number of layoffs in 2025?

As for future merger deals, Albertsons said during the earnings call that it plans to be “more reactive than proactive.”

Related:Costco workers are still without a new contract as deadline looms

Albertsons’ lawsuit against Kroger still in play

Meanwhile, Albertsons is involved in a lawsuit against Kroger, alleging the Cincinnati-based retailer made several missteps around the failed merger deal. These include drawing up an inadequate divestiture plan and acting in its own best interests to derail the deal after suffering “buyer’s remorse.” In the lawsuit, Albertsons claims that Kroger repeatedly violated a promise in the merger agreement to exercise best efforts toward getting the deal approved and, in the face of any threatened regulatory action to block the merger, to take any and all actions necessary to “eliminate each and every impediment” to close the deal. Albertsons also alleges that Kroger turned away more than 60 potential divestiture buyers. The company is seeking billions of dollars in damages.

In their own words

“Our strategy to win and earn customers for life includes finding new sources of productivity to enable us to invest in growth. After many years of productivity efforts across several parts of our company, we recently turned our attention to our general and administrative expenses and made the difficult decision to reduce the size of our corporate and division workforce.” —Albertsons in the statement regarding the layoffs

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