Raley\'s continued its cost-cutting Friday, laying off 153 workers at its West Sacramento headquarters.
The move came one week after the grocery chain reported it was eliminating the jobs of five top managers.
\"This was the final step in a process that was necessary for us to compete in this new world,\" new CEO Michael Teel said following a series of morning meetings with the laid-off workers, about one-fourth of the headquarters staff.
To comply with WARN Act guidelines that require notifications in advance of large job cuts, Raley\'s is placing the 153 workers on a fully paid leave of absence for 60 days.
After that, they\'ll be eligible for severance payments of one week of pay for each year of service, with a 26-week cap, Teel said.
Teel, who took over the company\'s top job in January, said the cuts were necessary to streamline an organization that had grown top-heavy.
\"In 2000, we started expanding because we planned to grow the business,\" he said. But those growth plans \"came to a screeching halt\" due to the national economic downturn and fierce competition in the grocery business.
The cutbacks will streamline management, making it more agile, while allowing Raley\'s to invest more in its stores, Teel said.
\"We\'re not doing this out of desperation or financial crisis,\" he said. \"We have strong cash flow but we want the flexibility and strength to react to the marketplace as it changes.\"
Southern California-based retail analyst George Whalin said Raley\'s is falling in line with other regional grocers facing competition from large discounters like Wal-Mart as well as specialty stores and middle-of-the-road rivals.
\"The fact that the new CEO has done two things - cut down on his management team, and now, layoffs in staffing - (shows) he\'s trying to get costs in line,\" Whalin said.
\"Regional supermarket operations are having tough times these days. If the costs are out of line, you need to do something.\"
Raley\'s challenge is complicated by its concentration in California, where it operates Bel Air, Nob Hill Foods and Food Source stores as well as Raley\'s markets, Whalin said.
\"It\'s a tough battle. California is not out of the weeds, and the housing market is still not out of the weeds,\" he said.
Earlier this year, Teel implemented cuts at stores, reducing the hours of many employees. Most have now recouped at least some of those hours.
Last week, Teel announced top-level cuts, resulting in the departures of the company\'s chief operating officer, its marketing chief and three other high-ranking executives.
On Friday, Teel said he met with four groups of employees at Raley\'s headquarters off West Capitol Avenue and delivered a simple message: \"Sorry. This is necessary for us to compete ... and our family appreciates your years of service.\"
Those employees were allowed to gather their possessions and then were sent home. At 1 p.m., the entire headquarters was closed, and all employees were given the rest of the day off.
\"This was the final step in a process that was necessary for us to compete in this new world,\" new CEO Michael Teel said following a series of morning meetings with the laid-off workers, about one-fourth of the headquarters staff.
To comply with WARN Act guidelines that require notifications in advance of large job cuts, Raley\'s is placing the 153 workers on a fully paid leave of absence for 60 days.
After that, they\'ll be eligible for severance payments of one week of pay for each year of service, with a 26-week cap, Teel said.
Teel, who took over the company\'s top job in January, said the cuts were necessary to streamline an organization that had grown top-heavy.
\"In 2000, we started expanding because we planned to grow the business,\" he said. But those growth plans \"came to a screeching halt\" due to the national economic downturn and fierce competition in the grocery business.
The cutbacks will streamline management, making it more agile, while allowing Raley\'s to invest more in its stores, Teel said.
\"We\'re not doing this out of desperation or financial crisis,\" he said. \"We have strong cash flow but we want the flexibility and strength to react to the marketplace as it changes.\"
Southern California-based retail analyst George Whalin said Raley\'s is falling in line with other regional grocers facing competition from large discounters like Wal-Mart as well as specialty stores and middle-of-the-road rivals.
\"The fact that the new CEO has done two things - cut down on his management team, and now, layoffs in staffing - (shows) he\'s trying to get costs in line,\" Whalin said.
\"Regional supermarket operations are having tough times these days. If the costs are out of line, you need to do something.\"
Raley\'s challenge is complicated by its concentration in California, where it operates Bel Air, Nob Hill Foods and Food Source stores as well as Raley\'s markets, Whalin said.
\"It\'s a tough battle. California is not out of the weeds, and the housing market is still not out of the weeds,\" he said.
Earlier this year, Teel implemented cuts at stores, reducing the hours of many employees. Most have now recouped at least some of those hours.
Last week, Teel announced top-level cuts, resulting in the departures of the company\'s chief operating officer, its marketing chief and three other high-ranking executives.
On Friday, Teel said he met with four groups of employees at Raley\'s headquarters off West Capitol Avenue and delivered a simple message: \"Sorry. This is necessary for us to compete ... and our family appreciates your years of service.\"
Those employees were allowed to gather their possessions and then were sent home. At 1 p.m., the entire headquarters was closed, and all employees were given the rest of the day off.
That was to give them time to absorb the changes at the company, the CEO said,
\"Sometimes,\" he said, layoffs are \"just as hard\" on those who keep their jobs.
That was to give them time to absorb the changes at the company, the CEO said,
\"Sometimes,\" he said, layoffs are \"just as hard\" on those who keep their jobs.
Read more: http://www.sacbee.com/2010/04/17/2685286/raleys-lays-off-153-workers-at.html