SuperValu's 1,100-employee layoff is big, but not a big surprise

After selling off half its business, SuperValu (NYSE:SVU) announced on Tuesday (March 26) that it will lay off 1,100 employees, including 38 percent of the workforce at its corporate headquarters in Eden Prairie, Minn. But the layoffs are not exactly a surprise, according to a report by the Minneapolis Star Tribune.

Part of the reason for the large headquarters headcount cut is that few SuperValu managers will be leaving with the Albertsons, Acme, Jewel-Osco, Shaw's and Star Market grocery chains that SuperValu sold earlier this month to Cerberus Capital Management. For the most part, Cerberus has promoted managers from within its own ranks to fill posts left vacant when the chains officially relocated to Boise, Idaho, on March 21.

(Cerberus already owned a sizable number of stores under the Albertsons banner, which it acquired after it and SuperValu bought the Albertsons chain in 2006 and divided the stores along regional lines. Many of the new executives for the reunited Albertsons chain are coming from Cerberus's Albertsons management.)

In addition, as part of the $3.3 billion deal, Cerberus got the right to choose a new CEO for SuperValu. The result has been an exodus of existing SuperValu C-level executives, as new CEO Sam Duncan installed largely execs from Kroger (NYSE:KR), OfficeMax (NYSE:OMX) and Cerberus-owned chains instead of choosing executives from within SuperValu.

Store-level employees are not expected to be part of the layoffs, the company said. Management at Supervalu's Save-A-Lot chain, based in St. Louis, will also see no layoffs. But SuperValu's other remaining grocery chains (Cub Foods, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's) will share in the pain.

For more:

- see this Star Tribune video

- see this Star Tribune story

- see this Progressive Grocer story

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