Kroger plans to cut approximately 3,000 corporate positions over the next three years in order to streamline operations, reduce costs, and make better use of artificial intelligence.

According to an internal memo sent to employees by CEO Greg Foran, these positions to be eliminated account for approximately 37% of the total number of employees at Kroger. Kroger currently has about 8,200 employees. The company expects to begin deciding which positions will be affected in the coming months.

Kroger Plans for Large-Scale Reorganization of Corporate Departments

Foran told employees that the current management hierarchy, handover processes, and administrative overhead of Kroger are more than what the company requires.

This reorganization is aimed at creating a more streamlined organization, while also redirecting resources to areas including lower grocery prices, improving store staff, and enhancing the customer experience.

Kroger is facing fierce competition from discount grocery chains such as Walmart, Costco, Amazon, and Aldi, which makes efficiency and pricing even more important.

AI is it the reason for Kroger's layoffs?

Artificial intelligence is an important part of the Kroger strategy, however, the company has not stated that AI will directly replace all 3,000 affected employees. Foran indicates that Kroger intends to utilize technologies that can improve efficiency and reduce repetitive work.

The company recently outlined a AI strategy, which includes AI auxiliary shopping tools, as well as a workflow management system that utilizes the vast customer data from Kroger. For Kroger, this technology seems to be part of a broader plan to simplify operations, rather than merely replacing employees.

"Our business is becoming more streamlined, more focused, and more competitive," Foran wrote in the memo, as quoted by Grocery Dive.

Kroger does not provide a detailed breakdown of which departments will face the largest number of layoffs. With the launch of the three-year reorganization, more information regarding the affected positions is expected to be disclosed in the coming months.