You probably still have a friend or relative who refers to Whole Foods as “Whole Paycheck.”
That’s because the brand (rightfully) has a reputation for being unnecessarily costly. The brand is trying to change that perception, but the company is going to have to break a few cage-free eggs first.
Namely, Whole Foods plans to cut 1,500 jobs over the next couple of months.
Earlier this summer, in a conversation with Fortune, Whole Foods CEO John Mackey touched on the retail dilemma of trying to compete on quality, service and price. He said at the time, “We realized we needed to make Whole Foods more price-competitive and take costs out of the system.”
The company is also launching a lower-cost chain that will be called 365. Employees that are laid off will have a chance to apply for new positions within the company or receive severance packages.
Business Insider first reported on the layoffs by publishing a company memo from Mackey and his co-CEO, Walter Robb:
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.com and we will respond.
We’d like to express our deepest appreciation as we all work together through this time.
John and Walter
What do you think of Whole Foods executives’ communication over the decision, PR Daily readers?