Whole Foods, which is owned by Amazon, is laying off hundreds of corporate employees in anticipation of a recession hurting its business later this year.
As Amazon looks to cut costs, Whole Foods will be reorganizing global and regional support teams over the course of the next two months, a spokesperson said, per CNBC. The reorganization will cause several jobs to be slashed in the corporate offices of the company, resulting in job loss for several hundred employees. The cuts affect less than 0.5% of the total workforce.
AMAZON TO LAY OFF 9,000 IN WAVE OF JOB CUTS
“We often talk about how simplifying our work and improving how we operate is critical as we grow,” the executive team said in a memo. “We’ve made great progress in these areas through previous operational and organizational changes. As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes."
“With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores,” the memo added.
Whole Foods currently operates in nine regions but will pare down to six regions as part of the restructuring. However, no Whole Food stores themselves, which have grown in popularity over the past several years, are planned to be shuttered.
Amazon bought the high-end grocery store in 2017 for nearly $14 billion.
Earlier this month, Amazon announced that it is laying off 9,000 employees from its staff, the latest wave of job losses.
The newest layoffs are on top of the planned 18,000 that Amazon announced in January. The cuts affect Amazon’s advertising department, Amazon Web Services, the Twitch livestreaming service, and others.
The news comes as economists increasingly predict that the economy will tumble into a recession at some point this year. The country’s labor market has been robust, but recent reports indicate that it is starting to weaken in response to the Federal Reserve raising interest rates several times over the past year.
Fed staff predicted a mild recession in a presentation to central bank officials at the Federal Open Market Committee’s March meeting, minutes from the meeting recently revealed. The meeting came just after the banking system was thrown into chaos with the collapse of Silicon Valley Bank, and staff noted that the fallout from the crisis raises the likelihood of an economic downturn.
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“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff's projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the Fed said in a readout of the meeting.
That was the first time central bank staff acknowledged that a recession is likely and that the Fed will likely be unable to pull off a “soft landing,” which is when inflation is driven down while the economy and labor market remain above water.