Kroger Offers Buyouts to 2,000 Employees

The Kroger Co. is offering a one-time buyout to 2,000 non-store employees that the Cincinnati-based grocer said is part of “ongoing cost controls” to maximize investment directly related to its Customer 1st Strategy.

Eligibility for the voluntary buyout will generally include administrative associates who meet certain criteria related to age and years of service as of Dec. 1, 2016. The offer does not include store and district associates, senior officers and supermarket division presidents.

“A critical focus of Kroger's Customer 1st Strategy continues to be ongoing cost controls in areas where customers do not see them in order to invest in areas that improve Kroger's connection with customers and associates,” the nation's largest pure play food retailer said in a statement. “The company's Voluntary Retirement Offering for non-store associates is in line with this approach.”

About 2,000 non-store associates are eligible for the buyout. Because it is voluntary, savings and cost will be based on the number of associates who accept the offer between now and early March, when the consideration periods expire. Expenses related to the offer will be reflected in Kroger's first-quarter 2017 results. The effect of this plan was not included in the company's initial comments on fiscal 2017.

"Kroger would not be the successful company it is today without the incredible efforts of all of our associates,” said Rodney McMullen, Kroger's chairman and CEO. “We believe a generous Voluntary Retirement Offering is in line with our company values and recognizes the long careers many of our associates have had with Kroger. Kroger is committed to our operating model of lowering costs to invest in the areas that matter most to our customers."

The buyouts by Kroger, which employs some 431,000 associates and operates nearly 2,800 retail food stores under a variety of local banner names in 35 states and Washington, D.C., follows a similar move made by other retailers of late, including Pittsburgh-based, Giant Eagle, which laid off roughly 350 corporate employees as part of a cost-cutting plan.

Giant Eagle, which employs about 34,000 in more than 420 locations, announced Oct. 17 that it planned to offer buyouts to some corporate staffers as part of a strategic plan aimed at reducing its overhead. “Beyond the voluntary separation agreements that have resulted, the company has made the difficult decision that additional positions across its corporate office must be reduced,” Giant Eagle spokesman Dan Donovan said at the time. “Considering both voluntary and involuntary actions, approximately 350 total positions have been eliminated as the company streamlines its corporate operations.




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