(Reuters) - Loblaw Cos Ltd, Canada’s largest grocer, said on Tuesday that it planned to cut about 700 head office and administrative jobs over the next three weeks in a move aimed at reducing costs.
The cuts, which will be primarily in management and administrative ranks, will result in a one-time charge of about C$60 million ($61.2 million) in the fourth quarter, the company said in a statement.
Loblaw, a subsidiary of George Weston Ltd, is one of Canada’s top private sector employers with roughly 135,000 full-time and part-time employees, across more than 1,000 corporate and franchise stores.
The company and its Canadian rivals face increasing competition as Wal-Mart Stores Inc increases its food offerings in stores across the country ahead of the arrival of U.S. discount retailer Target Corp in 2013.
“We’re managing costs where it makes sense by reducing administrative expense,” said Loblaw President Vicente Trius in the company’s statement.
“This change was made as part of a strategic plan to make Loblaw stronger as we evolve to address changing customer needs and ensure we have the flexibility to adjust to the demands of the marketplace,” he added.
In July, the retailer announced a deal to expand its Joe Fresh clothing line in the United States through a deal with U.S. department store chain J.C. Penney Co Inc.
In addition to groceries, Loblaw sells Joe Fresh products, including clothing, footwear, outerwear and cosmetics, in more than 300 stores in Canada, typically inside grocery superstores. The brand, with its distinctive bright orange color scheme, was launched in 2006.
Loblaw shares were up 1.2 percent at C$34.30 in early on the Toronto Stock Exchange on Tuesday.
($1 = 0.9806 Canadian dollars)
Reporting by Euan Rocha in Toronto; Editing by Chizu Nomiyama