Analysts Dissect Supervalu's Plan to Cut 800 Positions
The company said the majority of the cutbacks will take place by Feb. 25, the close of its fiscal year.
The reductions will not affect store-level employees, Supervalu said, but rather will affect personnel at all company offices and across most departments.
“These reductions are necessary to help further strengthen and accelerate Supervalu’s business turnaround in a very competitive marketplace,” said Craig Herkert , president and chief executive officer. “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.”
The company said the cutbacks are part of its overall strategy to deliver more competitive pricing for customers by reducing costs.
Karen Short, an analyst with BMO Capital Markets, New York, said the cost savings should be material, given the reductions in salary and benefit costs.
“For example, if we assume an average annual salary per employee of around $30,000 and assume healthcare and benefits of around $5,000, total savings associated with this reduction could be around $32 million pre-tax, or 9 cents in earnings per share after-tax.
