After a failed merger attempt and an announcement to cut billions in expenses, Albertsons has revealed plans for layoffs at its corporate and division support offices, Supermarket News reported.

The Boise, an Idaho-based grocery chain, did not provide a specific number of affected employees but noted in a statement that these layoffs are part of a long-term shift to relocate certain functions overseas.

In light of the proposed $24.6 billion merger being rejected by courts in Washington and Oregon, Albertsons is reassessing its position within the grocery sector. The company indicated that the unsuccessful merger created a competitive disadvantage, prompting a strategy shift to better compete with major players like Walmart and Amazon. 

During last week’s third-quarter earnings call, Albertsons announced a plan to reduce spending by $1.5 billion over the next three years and to enhance investments in technology. The grocery chain reported strong third-quarter results, surpassing analyst earnings expectations and achieving a 2% increase in same-store sales, along with a 23% rise in digital sales, partly driven by a 15% increase in loyalty memberships.

As the company prepares for significant budget cuts, it raises the question of whether this could signal the beginning of further layoffs in 2025. Regarding potential future mergers, Albertsons indicated its intention to adopt a “more reactive than proactive” approach.

Additionally, Albertsons is pursuing a lawsuit against Kroger, claiming the Cincinnati-based retailer mishandled aspects of the failed merger deal. Allegations include an inadequate divestiture plan and self-serving actions that contributed to the collapse of the deal. 

Albertsons asserts that Kroger repeatedly breached a commitment in their merger agreement to make every effort to secure approval and address any regulatory challenges. The lawsuit also alleges that Kroger rejected over 60 potential divestiture buyers, with Albertsons seeking billions in damages.

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