Kroger to lay off hundreds, amid questions about its turnaound plan

Daniel Acker | Bloomberg | Getty Images

Kroger is laying off hundreds of employees across the family of grocery stores it owns, a person familiar with the situation tells CNBC.

The unionized grocer, which also owns Harris Teeter, Ralphs, Fred Meyer, has 443,000 full-time and part-time employees.

A spokeswoman for Kroger told CNBC in a statement that “As part of ongoing talent management, many store operating divisions are evaluating middle management roles and team structures with an eye toward keeping resources close to the customer.”

She added that the company’s store divisions, which operate independently, are all “taking steps to ensure they have the right talent in the right store leadership positions.”

Shares of Kroger are down nearly 9% year-to-date, as it faces heightened competition from discount grocers Aldi and Lidl, as well as Walmart and Albertsons.

Meantime, its turnaround plan to invest in e-commerce and take on those challenges is in doubt. In September, CEO Rodney McMullen told analysts Kroger would not be “reconfirming” its expectation it would add $400 million in incremental operating profit as part of the three-year restructuring plan it calls “Restock Kroger.”

Kroger is not the first grocer to reconsider middle-management as it looks to restructure its business.

Walmart’s club store, Sam’s Club, in 2014 laid off 2,300 employees, including middle managers, as part of its turnaround. Last year, the retailer closed 63 stores and converted some of them to e-commerce facilities.