The country’s second-largest supermarket operator is making plans to shutter distribution centres in Alberta and elsewhere while consolidating work at a former Target warehouse that’s currently being “fully automated.”
Empire Co. Ltd said Thursday it plans to cut about 1,300 jobs from warehouse and back office positions, a move union officials say involves closing two facilities in Edmonton and Calgary.
The closures – as well as shifting of work to modern warehouses where far fewer workers are required – follow the mega-merger of Sobeys and Safeway in late 2013, a $5.8 billion blockbuster deal that’s seen the bulked-up grocery giant move to cut hundreds of millions in overlapping costs.
To further achieve those savings, Empire is laying the groundwork for a wave of warehouse closures between Ontario and Alberta set to commence early next year, a company official confirmed Thursday.
Several closures
The first location to close will be a distribution centre in Winnipeg slated to be shuttered in early 2016, affecting about 175 jobs. A Milton, Ont. distribution centre will close the following October after an automated facility goes “live” in Vaughan, Ont., the official said.
In Alberta, a Calgary distribution centre that employs about 200 will be shuttered by mid-2017, Andrew Walker, senior vice president of communications at Sobeys Inc. said.
‘We continue to assess our Alberta distribution network’
Work will shift to Target Canada’s former Western Canada distribution centre, a 1.3 million-square foot complex in Rocky View, Alberta, which Empire picked up from the departing retailer for $50 million last month.
Douglas O’Halloran, president of UFCW Local 401 which represents Edmonton warehouse works for Sobeys and Safeway said the union was informed that a facility there will be shuttered once the Target location has been overhauled to handle packaged food distribution.
Sobeys’ Walker said that outcome hasn’t been determined.
“We continue to assess our Alberta distribution network to ensure it is best positioned to meet the needs of our business both now and in the future, but have made no decisions around the future of our distribution facilities in Edmonton,” he said in a follow-up email.
Fully automated
On a conference call Thursday, Marc Poulin, CEO for Empire said the former Target warehouse was being transformed into a “fully automated facility.”
“Once operational, it will have the capacity to serve the dry-grocery needs of our stores in Alberta, Saskatchewan and parts of Manitoba,” the executive said.
“We remain committed to reducing costs wherever possible across the organization,” Poulin said.
Empire had told the UFCW union earlier this spring the company planned to build a new automated facility, according to O’Halloran, a move that would affect head count.
The union had worked out an agreement to preserve about 100 jobs at the new facility, but the agreement was reneged by Empire once the company successfully acquired the Target location, according to O’Halloran.
“Business is business, they cancelled the arrangement we had,” he said. “I’m pissed off about it. We worked hard to make a deal happen.”
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