business news in context, analysis with attitude

The Wall Street Journal reports that Amazon-owned Whole Foods "is planning to cut several hundred corporate jobs … as the grocer reorganizes its structure to simplify operations."

According to the story, Whole Foods is reducing its nine regions to six, restructuring some of its corporate teams, and making staffing cuts.  No stores or other facilities are scheduled to be closed as part of the reorganization.

The Journal writes that "the company spokeswoman said changes are aimed at better serving stores and customers as Whole Foods continues to expand. The company isn’t eliminating positions in stores or distribution centers, she said. Whole Foods anticipates that the cuts will affect less than 0.5% of its total workforce, which is about 105,000 people. The company, which has more than 500 stores, currently plans to open about 50 new locations."

The story notes that "supermarkets are navigating economic uncertainty after experiencing a boom to their business during the Covid-19 pandemic, which has prompted people to cook more at home. Whole Foods executives have said that inflation is affecting customers and that the company aims to hold more sale events."  At the same time, Amazon is in the process of laying off some 27,000 employees across the board, making it one of many tech companies making cutbacks in the current environment.

KC's View:

Staffing cuts usually are aimed at making businesses more efficient, but it remains to be seen, in each individual case, whether they actually make the stores more effective.

These cuts were to be expected, considering the number of layoffs in which Amazon is engaged.  But since Amazon has conceded that it really hasn't figured out the grocery business yet, and in my view never really has taken advantage of the synergies and learnings that Whole Foods ought to offer it, it is hard to know whether this will have the intended results.  Or if it is just, "We need to cut costs.  Do more with less."