Loblaws is cutting jobs Monday in order to contain costs, according to an internal memo obtained by the Star.
About 500 jobs are being cut at Loblaw Companies Ltd., beginning Monday, the company has confirmed.
The cuts are being made in corporate offices and include executives, members of management and employees across divisions and functions that support Loblaws, Shoppers Drug Mart and other retail stores, including No Frills, Joe Fresh and Zehrs.
“This will have no effect on hourly store roles,” said Loblaw spokesperson Kevin Groh, who added that the job losses are not related to any single fact, including the announced increase in the minimum wage to $15 an hour in Ontario and Alberta.
“Our industry is facing a range of pressures. This isn’t related to any single one. In fact, it’s really about our future. To invest meaningfully in promising areas means saving meaningfully in others,” Groh said.
“While this is a difficult time and process, there is a future that includes considerable job creation,” said Groh.
In a memo to staff on Monday, obtained by the Star, Sarah Davis, president, Loblaw Companies Ltd., said the move was being made to control costs.
“These decisions are difficult but necessary. Our business is at an inflection point, with growing pressures – from new costs and new competition – and with many opportunities to grow and evolve. As always, we continue to focus on our future,” Davis wrote.
The internal memo goes on to say that the company is committed to cost reductions and running the business efficiently.
Groh said the company is investing in areas including digital initiatives, online commerce, health care initiatives and financial services and is creating new positions, as it does so.
Loblaw Companies Ltd. announced in July 2013 that it had acquired Shoppers Drug Mart in a $12.4 billion deal.
Loblaws is one of Canada’s largest private employers, employing 200,000, according to Groh.
Loblaw chair and chief executive officer Galen Weston told analysts during a quarterly earnings call in July that the increase in minimum wage to $15 an hour in Ontario and Alberta was going to increase the company’s labour expenses by about $190 million next year.