Following a failed merger with Albertsons and ongoing economic uncertainty in an evolving retail landscape, Kroger is taking further steps to stay competitive, though not without making harsh decisions for the sake of its business.
In an internal memo, Kroger announced it will lay off around 1,000 corporate employees to streamline operations, cut costs, and refocus resources on in-store performance.
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The job cuts will primarily impact Kroger’s Technology and Digital division. According to a company spokesperson, no employees from in-store positions, manufacturing facilities, or distribution centers will be affected.
Kroger plans to reinvest savings from the layoffs into key areas such as lowering grocery prices, extending store hours, and expanding real estate capabilities to boost store performance and enhance customer experience.
Related: Kroger faces devastating consumer allegations
This marks at least the third round of corporate job cuts Kroger has implemented in 2025.
In February, the company eliminated a small number of roles to improve efficiency, followed by layoffs in March at 84.51°, Kroger’s retail data science and analytics subsidiary.
In June, Kroger revealed it would close 60 underperforming stores by the end of 2026 to focus on higher-performing locations. Of those, 39 have been named, and at least 18 have closed.
Kroger announces more corporate layoffs.
Image Source: ELIJAH NOUVELAGE/Getty Images
Kroger and Albertsons’ failed $24.6 billion merger
This major company restructuring follows the termination of a proposed $24.6 billion merger agreement between Kroger (KR) and Albertsons (ACI) in 2024.
The two grocery giants first announced the deal in 2022, with plans for Kroger to acquire Albertsons to form a national grocery powerhouse. The merger aimed to increase the brands’ footprints and allow them to better compete with retail rivals.
Related: Kroger quietly shuts down service that Walmart dominates
However, the Federal Trade Commission (FTC) blocked the deal, arguing it would reduce competition, raise grocery prices, lower product quality, limit consumer choice, and harm workers.
The case against the merger was further solidified when a Washington state judge ruled it violated state consumer protection laws.
Kroger shifts investment strategy to boost growth and maximize returns
Despite the mounting challenges, Kroger continues to deliver positive financial results. In the first quarter of fiscal 2025, total sales increased 3.2% year over year, with e-commerce sales up 15%.
However, recent cost-cutting measures are not a response to declining sales. Instead, they are part of Kroger’s strategy to realign its spending to focus on initiatives that offer the highest return.
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“In the past few months, we’ve made a number of changes to move faster and put increased focus on our customer. We’re directing investments toward projects that will grow our core business, including plans to accelerate new store openings,” said Kroger CEO Ron Sargent in an earnings call.
Kroger plans to complete 30 major store projects in 2025 and expects to accelerate new store openings in 2026 and beyond.
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