Giant Eagle will lay off, buy out 350 corporate employees to cut costs

Giant Eagle, Inc. will lay off corporate employees as part of a larger cost-cutting plan that involves eliminating 350 positions at the O'Hara-based grocery chain.

The company, which employs about 34,000 in more than 420 locations, announced Oct. 17 that it planned to offer buyouts to some corporate employees as part of a strategic plan aimed at reducing its overhead.

“Beyond the voluntary separation agreements that have resulted, the company has made the difficult decision that additional positions across its corporate office must be reduced,” Giant Eagle Spokesman Dan Donovan said in a statement Monday. “Considering both voluntary and involuntary actions, approximately 350 total positions have been eliminated as the company streamlines its corporate operations.”

A company representative said the “majority” of affected operations are at the grocery chain's headquarters. The company did not specify how many positions will be eliminated through buyouts as opposed to layoffs, and did not release the names of any other Giant Eagle locations where corporate employees could be affected. Timing of employee separations will vary based upon individuals' roles and responsibilities.

Giant Eagle's sales total about $9.3 billion.

In mid-October, Donovan cited “deflationary trends in pricing” as a factor hurting food retailers across the region and nation. He said Giant Eagle wanted to maximize efficiency, reduce overhead costs “and streamline our supply chain.”

Food prices fell for nine consecutive months in the United States as of September's end, the longest such streak since 1960 — with the exception of 2009, when the financial crisis was winding down. The cost of groceries was down an average of about 2 percent over the past year, according to the Bureau of Labor Statistics, including a nearly 9 percent drop for raw ground beef and 4.3 percent drop for roasted coffee.

Analysts point to low oil and grain prices, as well as competition from discounters, for the recent decline.

Donovan's statement said the grocery chain faces a “challenging food retail climate” and “is in the process of making numerous business decisions that will allow us to invest in both our business and our customers for years to come.”

He said company officials will try to place affected employees in new internal positions, and will offer severance packages and “outplacement assistance” to those who are laid off or bought out.

“While there are no further corporate office team member actions planned at this time, the company will continue to evaluate all aspects of our business to ensure we remain competitive for our team members and customers,” Donovan said.

Founded in 1931, Giant Eagle operates more than 420 stores throughout Western Pennsylvania, north-central Ohio, northern West Virginia, Maryland and Indiana, a company representative said.

Bloomberg News contributed to this report. Michael Walton is a Tribune-Review staff writer. He can be reached at 231-463-9742 or mwalton@tribweb.com