Sobeys parent company launches 'aggressive' $500M cost-cutting plan

Empire Co. Ltd. aims to reduce its costs by $500 million by the end of the 2020 fiscal year. Cuts to office staff are planned, but the company says front-line workers will not be affected.

Plan includes cutting office staff; cuts won't affect front-line store workers

Sobeys plans to cut $500 million by the end of the 2020. (Andrew Vaughan/Canadian Press)

Empire Co. Ltd. has launched a $500-million cost-cutting plan to turn around its Sobeys grocery business, which has been struggling to recover from missteps taken with the acquisition of Safeway Canada four years ago.

The company says it's aiming to hit its target by the end of its 2020 fiscal year, adding that the savings will come from a combination of measures including reductions to office staff.

CEO Michael Medline says he has an "aggressive goal" to overhaul Sobeys so that it becomes a leaner organization.

Medline, a former Canadian Tire executive, has made no secret of his desire to streamline Sobeys and change how it operates since he joined the company in January.

Management changes

The supermarket operator also announced changes in its upper ranks that include the retirement of executive vice-president Francois Vimard, who served as interim CEO before Medline arrived, and Sobeys Quebec president Yves Laverdiere.

The president of the Atlantic-Ontario business unit for Sobeys, Beth Newlands Campbell, will also leave next month after 18 months with the company.

Empire says the job cuts won't affect frontline store workers or staff at distribution centres.

"We have an aggressive goal to transform our organization, better serve our customers, empower our employees and assuredly move from defence to offence in the market," Medline said Thursday in a statement.

Headquartered in Stellarton, N.S., Empire and its affiliates and subsidiaries employ about 125,000 people.