Supervalu layoffs 800 workers

Grocery giant Supervalu is laying off 800 workers nationwide, including 200 in its home state of Minnesota, the struggling retailer said Tuesday.

Most of the Minnesota layoffs will occur at Supervalu's corporate offices in Eden Prairie, although 20 positions will be eliminated at its Cub Foods regional office in Stillwater, said Mike Siemienas, a Supervalu spokesman. A smaller number of layoffs will affect Supervalu's distribution center in Hopkins.

The layoffs represent about 7 percent of Supervalu's workforce in Minnesota, where it has about 3,000 employees.

"These reductions are necessary to help further strengthen and accelerate Supervalu's business turnaround in a very competitive marketplace," Supervalu Chief Executive Craig Herkert said in a prepared statement. "While the announcement of a workforce reduction is difficult news to share, due to its direct impact on our associates, these changes will allow us to better connect with customers and put more authority in the hands of people who interact more closely with our customers."

Siemienas reiterated that store-level employees who work with shoppers - the cashiers, clerks, department managers and the like - are not included in this round of layoffs.

One hard-hit area is information technology, where 149 Minnesota positions are being eliminated as those jobs are outsourced. Supervalu has signed a managed-services contract with Tata Consultancy Services, which will operate IT services from India as

well as in other foreign and domestic sites.
"The IT department was notified back in October that this transition was going to be taking place, so that department has been very upfront with its associates about what the plan was," Siemienas said.

Supervalu owns regional grocery chains across the United States, including market-leading Cub Foods in Minnesota, Jewel-Osco in Chicago, Albertson's on the West Coast and Save-A-Lot discount stores, which are most popular in the South.

Supervalu has struggled in recent years, as middle-market supermarkets try to fend off aggressive competition from non-unionized discounters like Walmart, Target and Aldi, as well as from shopping clubs like Costco and Sam's Club.

In 2006, Supervalu doubled-down on the supermarket concept, buying most of the troubled Albertson's grocery empire. The deal increased Supervalu's national footprint to 2,400 stores but left the company burdened by huge debt and locked into a difficult segment of the fast-changing grocery business.

Ever since, the company has been selling off assets and pruning, trying to turn things around, but its struggle has continued. Of the 17 analysts who follow the stock, only three rate Supervalu as a "buy."

Supervalu shares were mostly flat on the news, sliding 6 cents to $6.87.

Source: Twin Cities