Massive layoffs at Sobeys are hitting Stellarton, the community that’s home to the national grocer’s head office, hard.
Sobeys is axing 100 people in Stellarton, a community with a population of just over 4,000 people, and laying off another 50 employees elsewhere in the province. Across the country, 800 people are losing their jobs in this second round of layoffs as the company restructures.
“This is one of the toughest things any company ever has to do,” said Michael Medline, president and chief executive officer of Sobeys’ parent company, in a statement. “Change of this magnitude is not easy on our team and we are lending every support we can to people transitioning.”
Dubbed Project Sunrise, the restructuring at Sobeys is expected to shave $500 million annually off the company’s expenses by the year 2020.
In mid-October, the company started that restructuring by laying off dozens of corporate execs across the country, including 14 in Pictou County and another three in Dartmouth.
With this latest round of layoffs of office employees and field representatives, the company has now completed what it is calling the first phase of Project Sunrise.
“The first phase of our plan to transform our business, which has been focused on resetting the foundation of Sobeys and creating a new organization structure, is now substantially complete,” said Medline.
“The work to restructure the company is fundamentally changing our operating model from a collection of five regional businesses to one, national organization,” he said. “This will allow us to be more efficient in many ways and to be more agile as we pursue new opportunities to compete and win the loyalty of Canadians.”
Although the layoffs were expected in Stellarton, community leaders are still mourning the loss of those jobs.
“We feel terrible about each individual who has to move on from Sobeys,” said Jack Kyte, executive director of the Pictou County Chamber of Commerce, in an interview Friday.
Mayor Danny MacGillivray expressed sorrow about the job losses, saying they are a blow to the community.
“We’re saddened here in Stellarton that there will be reductions in the office operations but we do understand that they need to do this to sustain long-term efficiencies,” he said.
Community leaders in Stellarton, though, are also looking at the silver lining, noting that now the layoffs are over and Sobeys still seems committed to remaining in that Nova Scotia community.
“It equates to about 10 per cent of the workforce (at Sobey’s Stellarton head office) and the layoffs are about 20 per cent (of the Sobeys workforce) nationally,” said the mayor. “So, I think that shows they still have a long-term commitment to Stellarton.”
At the local chamber of commerce, there was almost a sense of relief Friday that the cost-cutting didn’t go any deeper.
“I don’t have a sense of shock,” said Kyte. “We were aware something was coming but we didn’t know what. It could have been worse.”
Half of the 50 employees being laid off in other parts of Nova Scotia are in Dartmouth; another 25 are in the company’s field offices.
In addition to the job losses in Nova Scotia, Sobeys is also cutting three employees on Prince Edward Island, 14 in Newfoundland and Labrador, and another 19 in New Brunswick, said Sobeys spokesperson Jacquelin Corrado.
That's a total of 186 jobs shed by Sobeys in Atlantic Canada.
Empire Company, which owns Sobeys, is now in its media blackout period ahead of releasing its second-quarter financial results on Dec. 13, and so officials with the company refused to divulge how much the latest round of layoffs, severance packages and support programs would cost.
But an estimated $200 million has previously been reported as the cost of making these changes under Project Sunrise.
Empire, which has a market capitalization of more than $6.77 billion and trades on the Toronto Stock Exchange under the EMP ticker, saw its share price rise 31 cents in late afternoon trading Friday to hit $24.97.