Food Lion parent will fire 350 corporate workers

Published 12:00 am Wednesday, February 6, 2013

SALISBURY — Delhaize America, the parent company of Food Lion, will fire about 350 corporate employees as part of a reorganization that started in December with the ouster of Cathy Green Burns as Food Lion president.
All layoffs will be above the store manager level, according to an internal email sent to employees Tuesday by Delhaize America CEO Roland Smith.
The memo did not specify how many Food Lion employees will lose their jobs, and a spokeswoman said she could not give details by company. Salisbury-based Delhaize America owns several grocery chains, including Bottom Dollar Food, also headquartered in Salisbury.
Employees will know by Tuesday if they will lose their job. In total, Delhaize America is cutting 500 jobs, including 150 open positions.
The news comes on the heels of Daimler Trucks North America’s plan to temporarily lay off 715 workers April 1 at the Freightliner plant in Cleveland.
Delhaize supervisors will begin having conversations with their employees soon, spokeswoman Christy Phillips-Brown said.
Last month, Delhaize America cut 25 percent of high-level leadership positions and internally unveiled a new organization structure that includes 50 officers. Fifteen executives lost their jobs in the leadership shake-up.
Tuesday’s layoff announcement continues the new strategy.
“As previously announced, Delhaize America has been focused on implementing a new organizational structure that enables the company to operate more effectively and efficiently,” Phillips-Brown said. “In support of this continued work, the company has made a number of organizational changes across Delhaize America, which will be communicated to associates this week.”
The decisions were carefully considered and made with the ultimate goal of serving customers, growing business and creating shareholder value, she said.
Phillips-Brown said she could not say how many people who work in Salisbury will lose their jobs. Delhaize America employs about 100,000 people overall.
“A reduction of this magnitude required hundreds of difficult decisions, especially in light of the impact these decisions will have on many of our capable and long-tenured associates,” Smith said in the memo.
Calling the reorganization a difficult time for Delhaize America, Smith said the company is “moving as quickly as possible with this process while still taking the time necessary to ensure our associates are treated with dignity and respect.”
“I appreciate that the next week will be emotionally difficult, as these decisions will have a profound and personal impact. I also know that these organizational changes may be hard to understand and accept,” he said. “However, please understand that the DA Officer Team and I firmly believe that this new structure and team of talented associates are the foundation for DA’s future success.”
Smith pledged to send more information by the middle of next week that will “provide much greater detail about our new organizational structure and dates for upcoming town hall-style meetings.”
Last month’s cuts of top management came as part of Delhaize America’s continuing efforts to reduce costs across the company and increase efficiency.
The company initiated an effort last summer to significantly reduce non-production costs and bring the ratio of costs to revenue in line with market standards, with plans to reinvest the savings in stores.
“Despite best intentions and efforts, our cost-saving targets were not achieved,” Smith said in a Jan. 11 memo.
Currently, about 80 percent of Delhaize America officers are located in Salisbury, and Smith has moved the Delhaize America CEO office back to Salisbury from Scarborough, Maine.
Food Lion, which makes up the lion’s share of Delhaize, has struggled, closing 113 underperforming stores last year and pulling out of Florida.
But the makeover of 703 Food Lion stores, including those in Rowan County, appears to be paying off for Delhaize.
Food Lion recorded its best quarterly performance since 2006 during the fourth quarter of 2012.
Delhaize last month announced plans to close eight underperforming Food Lion stores, as well as 33 Sweetbay locations.
The company’s stock price fell by more than 30 percent in 2012 but on Tuesday closed up at $48.72 per share.

Contact reporter Emily Ford at 704-797-4264.