Whole Foods Market Inc. plans to eliminate 1,500 jobs to reduce costs and fight back against rivals that are undercutting its prices.
The positions, representing about 1.6 percent of the company’s workforce, will be eliminated over the next eight weeks, with many coming through attrition, the Austin, Texas-based grocery-store chain said Monday in a statement.
Whole Foods is working to keep expenses low so it can offer its organic and natural products at lower prices and beat back an onslaught from mainstream grocers that now carry similar offerings. The company in July reported third-quarter profit and sales that trailed analysts’ estimates as the new competition restrained growth.
Whole Foods fell 1.1 percent to $30.75 at the close in New York. The shares have slid 39 percent this year, while the Standard & Poor’s 500 Index has lost 8.6 percent.
Co-Chief Executive Officer Walter Robb called the job cuts a "very difficult decision," and the company said it is paying the workers in full during the next eight weeks.
Whole Foods, which has about 420 locations, has seen its growth slow as traditional supermarkets carry more natural and organic fare. Wal-Mart Stores Inc. sells Wild Oats organic foods, while Kroger Co.’s Simple Truth line has reached $1 billion in annual sales.
The company is responding by opening a less-expensive, tech-focused grocery chain called 365 by Whole Foods Market. The first location is set to open next year in Los Angeles.