Money Matters - Simplified

Albertsons announces major layoffs in its Southern California division

Albertsons announced Wednesday that it is laying off roughly 2,500 of its workforce, blaming the cuts on an increasingly competitive market and slump in sales.

The grocery giant, Albertsons announced Wednesday that it is laying off roughly 2,500 of its workforce, blaming the cuts on an increasingly competitive market and slump in sales.

The job cuts will take place over a two-week period beginning June 17 and impact 247 of Albertsons Southern California and Las Vegas supermarkets.

The move is expected to reduce the workforce by approximately 12 to 13 percent of its Southern California division.

“A decision of this nature is never easy, but it is the necessary step for us to take to help improve our business and accelerate our turnaround,” said Dan Sanders, president of the chains’ Southern California Division, in a news release.

“Our goal is to more effectively serve the marketplace by scheduling associates more appropriately to serve customers at the times they shop. I am confident our team will embrace these changes and help us to compete more effectively in a rapidly changing marketplace.”

Working on transition
Though the exact number of layoffs is not official yet, around eight to 10 employees on an average will be fired from each store. However, no additional rounds of layoffs or any store closings are planned as of now.

Albertsons is working with local union on the layoffs. The focus will to shed jobs on the basis classification and seniority.

Senior employees will be entrusted with lesser positions, so that new employees or those with the least experience will bear the brunt of the lay-offs.

The grocery chain shuttered stores in Riverside, Menifee and Coachella last year and sold locations in Hesperia and Lake Elsinore to Stater Bros.

Albertsons cut 30 positions in January in Southern California, including 10 in Murrieta and Rancho Cucamonga and reduced staff in a Fullerton support center in February.

The company is focusing on “simplifying the organization and reducing expenses” to reduce costs and utilize the savings in improving stores and lowering prices.

Sanders stated, “While Albertsons’ commitment to the neighborhoods it serves remains the same, the need for change at the company is clear. Albertsons has not kept pace with the changing needs of its customers for a number of reasons."

"At the same time, while the division has experienced a reduction in traffic and an overall decline in sales, it has not made the necessary adjustments to its store-level operations."

Rocked by competition
Albertsons, owned by Minnesota-based Supervalu, has suffered massive losses in its Southern California stores as it faced competition from discount retailers such as Walmart, Target and dollar-store chains, which have been expanding in the region and elsewhere in the country.

High-end grocers such as Whole Foods and Trader Joe’s and ethnic stores like Inland Cardenas Markets and Rio Ranch Market chains are tough contenders.

Michael Siemienas, an Albertsons spokesman for the Eden, Prairie, Minn.-based SuperValu Inc., which is the grocery chain's parent stated, "The supermarket industry is extremely competitive, and we need to ensure that we are running as efficiently as possible.”