Kroger plans to cut 3,000 corporate jobs, about 37% of its corporate workforce

Kroger plans to eliminate about 3,000 corporate roles over the next three years, roughly 37% of the 8,200 people in its corporate workforce, according to a memo from chief executive Greg Foran reported by Reuters and Bloomberg. Kroger confirmed the 3,000 figure to Progressive Grocer and to Newsweek. Newsweek reported that the reduction would rank among the largest layoffs in the grocer's 143-year history.

The proportion is what sets this apart. Kroger cut nearly 1,000 corporate roles last year, according to Progressive Grocer and Newsweek. On the reported headcount, this round would leave the company with about 5,200 corporate employees, a figure Cincinnati CPG Edge attributed to the Cincinnati Business Courier's reporting on the memo. Those employees sit inside a company of more than 400,000 associates, by Kroger's own count.

The memo, which Kroger also shared with Business Insider and Grocery Dive, offers two reasons. The first is structure. "Our company has more layers, more handoffs and more overhead than we need, so we are addressing this issue," Foran wrote. The second is technology: "The way work gets done is changing across every industry; we must adapt and take advantage of technology. We need to adopt capabilities, reduce duplicative work and look closely at where work is best fit to be done."

The jobs that survive will be wider. Foran wrote that the changes "will create broader roles and faster decision making," language that points to fewer people each carrying more of the remaining corporate work. The reductions will fall "across many functions" and take place over multiple years, according to the memo, with decisions about affected roles to start being communicated in the coming months. Employees in corporate hubs including Cincinnati, Charlotte and Portland face a long wait, according to Particle's summary of the coverage. Foran promised staff that the company "will not ask anyone to wait longer than necessary for clarity about their roles."

The AI rationale arrives three weeks after Kroger laid out its strategy in public. At the GroceryShop conference on Sept. 22, chief digital officer Yael Cosset described a progression from assisted to augmented to autonomous AI, and drew a boundary: "The goal is not autonomy everywhere." The company said it was building agents to help frontline teams sort through dozens of daily notifications and tasks, and making AI literacy training available to more than 400,000 associates. "At our core, the human connection to a customer or fellow associate will never be replaced by AI," Cosset said.

Set against that, the memo shows where the headcount reduction is aimed. The September strategy cast AI as a tool for frontline teams and associates; the cuts land on the corporate side, and Foran framed them as funding the front line. "These reductions will allow us to continue to invest in our frontline associates," he wrote. The memo describes the cuts as reducing duplicative work and helping lower prices.

The commercial pressure behind it is plain in the numbers. Kroger's second-quarter sales rose to $34.6 billion from $33.9 billion a year earlier, and identical sales excluding fuel grew 0.2%, Progressive Grocer reported. The company lowered its full-year identical sales outlook to a range of 0.2% to 0.8%, from 1% to 2%, while keeping its profit expectations. Numerator data cited by Progressive Grocer show Kroger added more than 1 million high-income households in the 12 months to July 31 but lost 700,000 lower-income ones, and that Kroger shoppers moved $12 billion in consumer packaged goods spending to Amazon, Walmart and Costco. Executives have said they expect to finance price investments through savings across the business, according to Newsweek.

Flattening the office has become central to Foran's agenda. A former Walmart U.S. chief executive, he took over at Kroger in February and has since brought in two former Walmart executives, Nate Faust as e-commerce chief and Mark Ibbotsen as chief store operations officer, alongside a new chief people officer and a chief data and AI officer, Grocery Dive reported. In May he told Bloomberg that "the basket has to come down," across thousands of products.

The previous corporate cut came with a similar promise. Interim chief executive Ron Sargent said last year's reduction would simplify the company and let it focus on store improvements and openings, Newsweek reported; weeks earlier Kroger had said it would close around 60 stores over 18 months.

Kroger holds its investor day on Oct. 20, according to Cincinnati CPG Edge, an occasion for the company to explain to shareholders how the 3,000 cuts fit Foran's plan.