Migros announces first redundancies due to group restructuring

The new Migros Supermarkt AG is cutting its first jobs as announced. On Tuesday, the management informed employees about the job cuts in a livestream, as announced by Migros on the same day. Around 150 employees will lose their jobs and a further 100 will be given notice of redundancy.

The job cuts at Supermarkt AG were announced by Migros according to a report by the portal Inside Parade Ground confirmed on Friday. According to the press release, employees at the Migros headquarters on Limmatplatz in Zurich will be affected by the redundancies. Administrative offices are mainly located there.

All Supermarkt AG directorates are affected, including the fresh produce, food and non-food directorates as well as the marketing communications, finance, operations, sales and staff departments, a spokesperson explained on request. "In absolute terms, the most jobs will be lost in marketing communications," he said. Store staff, however, are not affected by the measures.

According to the press release, those made redundant will be supported in their professional reorientation. As previously announced, Migros has also introduced a new social plan with effect from May 1 in view of the forthcoming redundancies. As part of the realignment, a total of around 1500 jobs will be cut in the company.

In a statement, the trade union Unia called on Migros to refrain from dismissals. In addition, the retailer should support all employees in their search for a new job within or outside the group.

New structure

The management of Supermarkt AG has redesigned the organizational structure together with a project team from all directorates and external consultants - according to media reports, this is a team from the consulting firm McKinsey. This new structure has now been approved by the Board of Directors of Supermarkt AG and will be implemented on July 1, 2024.

The aim of the realignment is "simplified processes, lean structures and clear roles". The background to this is that Migros wants to make savings under its new bosses Mario Irminger, head of the Federation of Migros Cooperatives, and Peter Diethelm, head of Migros Supermarkt AG.

In the course of this, the company also intends to sell several specialist stores and subsidiaries, including the electronics retailer Melectronics. According to the spokesperson, the sale is proceeding "according to plan".

However, as Migros writes in its latest press release, the planned sale of Melectronics will lead to changes in around 50 of Migros' larger supermarket branches. "This refers to the Melectronics sales areas within Migros supermarkets, similar to shop-in-shop formats," said the spokesperson.

In future, Melectronics will only sell a "basic range of electronics items" at these locations. Unlike the independent Melectronics stores, these sales areas within Migros supermarkets will not be for sale.

Migros gives up Nutri-Score and food delivery service

In addition to the redundancies, Migros Supermarkt AG is implementing various other cost-cutting measures. One of these concerns the voluntary Nutri-Score food label. Migros wants to gradually remove the Nutri-Score from its products.

The reason given by the company is that the label brings too little and costs too much. "Experience since its introduction three years ago has shown that the benefits are too small in relation to the high costs," the press release states. However, Migros does not want to put a figure on the current costs of the label. "What we can say is that the costs for the phase-out are significantly lower than the further conversion and any future adjustments to all products," said a spokesperson.

The Nutri-Score is a food labeling system used in various European countries that uses a color and letter system to compare foods in the same category in terms of their balance. The federal government supports the initiative, which was developed by the French Ministry of Health.

Migros has also announced that it will discontinue its Foodnow food delivery service at the end of May. The delivery service, which was launched in 2020, is comparable to services such as Eat.ch or Uber Eats and delivers food from restaurants to customers. "Despite around 600 restaurant partners, considerable growth in orders and the expansion of the delivery area, it was unfortunately not possible to achieve the business targets", Migros explains the decision to discontinue Foodnow.

Freshness boss leaves

There will also be a departure from the management team at Migros Supermarkt AG. Sandra Stöckli, who has been in charge of the Fresh Food Directorate since last summer and acted as deputy to Migros Supermarkets boss Peter Diethelm, is handing over the reins at the end of June.

She will then leave the company completely at the end of August. According to the press release, there are no plans for a successor to head the Fresh Produce Directorate. Instead, the Food and Fresh Produce Directorates will be merged into a single Directorate. Miriam Richter, who has been responsible for Food & Procurement Management since March, will head the combined directorate in future. (SDA)

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