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Nov 24, 2017

Sobeys cutting 800 jobs as part of CEO’s turnaround plan

A Sobeys grocery store in Halifax

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Sobeys is cutting 800 jobs, or about 20 per cent of its office staff, as the grocer looks to cut costs and automate more tasks.

“This is one of the toughest things any company ever has to do. Change of this magnitude is not easy on our team and we are lending every support we can to people transitioning,” CEO Michael Medline said in a statement.

“The future success of Sobeys, and our continued service to over 900 communities across the country, depends on our steadfast commitment to transform our business.”

The cuts come as Sobeys’ parent company, Empire Co., aims to slash $500 million in annual expenses by 2020. The effort, dubbed “Project Sunrise” by Medline, comes as he attempts to right the ship in the wake of Empire’s disastrous $5.8-billion takeover of Safeway Canada four years ago.   

When the plan was announced in May, Medline telegraphed the grocer had no intention of cutting front-line, customer facing jobs. The company said the restructuring would only affect office staff in a bid to reduce the duplication of roles and make the decision-making process less complex. 


EMPIRE TIMELINE 

June 12, 2013: Company announces $5.8-billion takeover of Canada Safeway.

Nov. 4, 2013: Canada Safeway takeover closes.

Dec. 12, 2014: “We … are on schedule with our integration plan,” said then-CEO Marc Poulin in the Q2  fiscal year 2015 earnings release.

Sept. 9, 2015: Q1 fiscal year 16 net profit falls 11.6 per cent.

“Although we had identified the various risks associated with integration, including the amount and pace of change required, we underestimated the impact and the time needed for the organization to adapt to those changes. This had a clear and negative impact on our first quarter results," said Poulin in the earnings release. 

Dec. 8, 2015: Q2 fiscal year 16 net profit falls 41.4 per cent

“As anticipated, our second quarter results continued to trail performance versus the same period last year as the integration of Safeway continues to present challenges,” said Poulin in the earnings release.

March 9, 2016: Books $1.7B impairment charge in Q3 fiscal year 16; adjusted profit falls 30.4 per cent

“The challenges that we experienced in the first half of fiscal 2016 related to the integration of our Safeway business only intensified in the third quarter. In addition, increased promotional activity across the West as well as a difficult economic environment mainly in Alberta and Saskatchewan, resulted in sales erosion in our Safeway banner and West business unit," Poulin said in the earnings release

June 28, 2016: Books $1.3B impairment charge in Q4 fiscal year 16; adjusted profit falls 30.3 per cent

“The previously reported challenges in Western Canada that have had a negative effect on our results over the past three quarters deepened through the fourth quarter...," said Poulin said in the earnings release.

July 8, 2016: Poulin ousted as CEO, replaced by CFO François Vimard on interim basis.

Dec. 14, 2016: Q2 fiscal year 17 net profit falls 51.7 per cent.

Jan. 12, 2017: Former Canadian Tire executive Michael Medline named CEO

May 4, 2017: Announces $500-million cost-cutting plan dubbed Project Sunrise

Nov. 24, 2017: Discloses 800 layoffs