Sensitive to its reputation for high prices, the high-end grocer is reducing overhead. It's hard on employees—but it'll help ease the toll on consumers' wallets.
The company's shares have fallen more than 35% this year.
Here's the full memo to employees, according to Business Insider's source:
Dear Team Members,
We are writing to tell you directly that we have made the difficult decision to reduce a number of positions across the company over the next two months. This will happen primarily through both consolidating and eliminating certain store and regional positions. We do expect some of the affected Team Members will take other positions in the company, and together with vacant positions remaining unfilled, we anticipate that this decision will mean an overall reduction of approximately 1,500 Team Members (1.6% of our overall workforce). Regional leadership is making every effort to speak to all affected Team Members by Tuesday morning.
We are committed to treating our Team Members in a caring and compassionate manner, so Team Members who are affected will be paid in full over the next eight weeks as they decide on what option works best for them. This may include transition pay plus a generous severance package above the industry norm, or the opportunity to choose to apply for jobs from the nearly 2,000 currently open positions. We hope many of these Team Members will choose to stay in the company in a new role. For those Team Members who choose to leave, we thank them for their service and contributions.
So, why are we making these changes now? Over the last few years we’ve discussed ways to make Whole Foods Market an even stronger company in a rapidly changing marketplace. We agreed that we must invest in lowering our prices, marketing our value and standards, and upgrading our technology in order to better serve our customers.
We know this is difficult news because it affects many hard working and dedicated Team Members in our Whole Foods Market family. We encourage you to reach out to your leadership with any questions directly or in upcoming meetings. You can also contact us both at TMFeedback@wholefoods.comand we will respond.
We’d like to express our deepest appreciation as we all work together through this time.
I left to go to Sprouts. Whole Foods has changed so much over the years. When I started we had no cutting gloves and we could wear shorts! Now I don't know if I should sell my stock or what.
My daughter woks for a Whole Foods subsidiary called Greenlife. She was one of those affected. She was told she will be laid off but can stay if she takes a $3/hour pay cut.
I left to go to Sprouts. Whole Foods has changed so much over the years. When I started we had no cutting gloves and we could wear shorts! Now I don't know if I should sell my stock or what.
I have compiled several different interviews done by the news media over the years
"Here is an excerpt from the CEO and Co-Founder John Mackey:Earlier this year the company announced that it will launch a new lower-priced chain called 365. It’s a way to jump ahead on price reductions while the flagship brand moves to take out costs systematically. “We realized that if we started a new kind of store, we could lower our prices immediately,” The thinking behind the new brand—leaning toward price and quality over service—will be built with cheaper material, operated on smaller footprints, and have an assortment of lower-priced goods. “365 is an evolutionary strategy,”. And, of course, it’s a lot easier to charge less when you have reduced your own expenses." "No doubt the hourly wage will be lower in the new store format."
"One of their core-values concerning team-members; We recognize there is a community of interest among all of our stakeholders. There are no entitlements; we share together in our collective fate. To that end we have a salary cap that limits the compensation (wages plus profit incentive bonuses) of any team member to nineteen times the average total compensation of all full-time team members in the company. " Not sure what 19 x average means!
"One of the most important things we do is we’ve organized our stores and our workforce into teams. People need to have that sense of that community, and we need to feel that we’re part of a group, that we’re an essential part of it, that we’re contributing to that group, and that our work… that people depend on us, that our work makes a difference--not only to the larger community but it makes a difference to the people that we’re working with, that if we’re not there, then the team suffers. " How about the laid off workers they will suffer! This might draw the union in!
" We set an official internal goal in 2000 to be a $10 billion company by the end of the decade. We’re growing at about a 15 to 20 percent clip, and we’ll be close to $4 billion this year, so if we continue to do that, and you look ahead 20 years, we’ll be $30 billion probably."
Personally I think that this last paragraph may be one of the reasons they had to make these job cuts.
So, why are we making these changes now? Over the last few years we’ve discussed ways to make Whole Foods Market an even stronger company in a rapidly changing marketplace. We agreed that we must invest in lowering our prices, marketing our value and standards, and upgrading our technology in order to better serve our customers.
HOW DOES LAYOFFS ACCOMPLISH THE AIM ABOVE?
LAYOFF PEOPLE, STRONGER? NO
LAYOFF PEOPLE STOPS MARKET CHANGES? NO
LAYOFF PEOPLE LOWERS PRICES? NO
LAYOFF PEOPLE HELPS MARKETING VALUE AND STANDARDS? NO
LAYOFF PEOPLE PAYS FOR NEW TECHNOLOGY? NO
LAYOFF PEOPLE HELPS SERVE CUSTOMERS? NO
ALL RIDICULOUS LIES. YOU SUCK. PERIOD
With better quality and lower costs, you can capture the market with better quality and lower price.
Labor is the most accessible controllable in retail. But then there is Henry's Law: "Sales Volume will always decrease to the level where the help can handle it."
Labor is the most accessible controllable in retail. But then there is Henry's Law: "Sales Volume will always decrease to the level where the help can handle it."
Labor is the most accessible controllable in retail. But then there is Henry's Law: "Sales Volume will always decrease to the level where the help can handle it."
I like that. I'm gonna have to borrow that from you