Supervalu Cuts 1,100 Office Jobs, 600 in MN

Supervalu Cuts 1,100 Office Jobs, 600 in MN

The company, which is much smaller after having just divested five grocery chains, is eliminating about 22 percent of its Minnesota office jobs.

Eden Prairie-based Supervalu, Inc., announced Tuesday that it is eliminating about 1,100 corporate and regional office positions, including 600 in Minnesota.

The move comes less than a week after Supervalu completed its $3.3 billion deal to divest five of its largest retail grocery brands. The sale made Supervalu a significantly smaller company.

The cuts will affect nearly all company offices and departments nationwide. About 600 jobs will be eliminated in Minnesota at the company’s Eden Prairie headquarters and its Cub Foods support center in Stillwater, according to spokesman Mike Siemienas. That represents about 22 percent of Supervalu’s 2,700 Minnesota corporate and office positions. (Nationwide, the company has about 35,000 employees.)

The approximately 6,000 Supervalu store employees in Minnesota are not affected, Siemienas said. Laid-off workers will be offered severance packages and outplacement services based on the company’s eligibility guidelines.

The job reductions will occur through cuts, as well as through leaving open jobs unfilled. Timing of the job cuts will vary “based on the needs of the business and the areas they support,” the company said.

“The decision to reduce our work force, although difficult because of the impacts to our people, is the necessary next step in the rebuilding of our business,” President and CEO Sam Duncan said in a statement. “This move is an important part of our strategy to be more focused and efficient in our operations, including how we staff and support our three business units going forward.”

Karen Short, an analyst at BMO Capital Markets who closely follows Supervalu, described the downsizing as “evidence of Sam Duncan moving quickly and decisively”—marking “probably the first time Supervalu has moved quickly and decisively in years.”

Supervalu is “left with decent banners and a strong distribution business, and it’s a step in the right direction,” Short told Twin Cities Business.

Supervalu’s deal to sell five grocery chains was first announced in January, and it led to the appointment of Duncan as CEO; he replaced Wayne Sales. As part of the deal, the company sold 877 Albertsons, Acme, Jewel-Osco, Shaw’s, and Star Market stores, as well as the associated Osco and Sav-on in-store pharmacies, to an investor consortium led by New York-based private investment firm Cerberus Capital Management L.P.

Supervalu was Minnesota’s fourth-largest public company based on revenue for the fiscal year that ended in February 2012, which totaled $36.1 billion. The smaller company is expected to be about half that size, with annual sales of roughly $17 billion.

Supervalu said that it will now be a “more focused and efficient wholesale and retail operation.” The new Supervalu consists of three business units: independent business, a food wholesaler that serves nearly 2,000 stores across the country; Save-A-Lot, a discount grocery chain that has more than 1,300 stores in the United States; and regional banners Cub Foods, Farm Fresh, Shoppers, Shop ‘n’ Save, and Hornbacher’s.

On Friday, the company announced a series of new leadership appointments. Randy Burdick was named executive vice president and chief information officer, and Michele Murphy was named executive vice president of human resources and corporate communications. Murphy replaces Dave Pylipow, who will leave the company at the end of April. J. Andrew Herring, executive vice president of real estate, market development, and legal, will also exit the company, Supervalu said.

Shares of Supervalu’s stock were trading up about 2 percent at $5.15 mid-morning Tuesday.

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