Whole Foods’ pursuit of more affordable prices in an increasingly competitive market for organic groceries is forcing it to make some tough choices. On Monday, the chain announced that it will cut about 1,500 jobs over the next eight weeks, or roughly 1.6 percent of its workforce. Whole Foods says the reductions are part of the company’s “ongoing commitment to lower prices for its customers” as well as to “invest in technology upgrades while improving its cost structure.”
Whole Foods employs approximately 91,000 people companywide. Of the 1,500 positions being cut, Whole Foods says many will be “managed through natural attrition.” The company also says that it has nearly 2,000 openings at the moment and expects “a significant percentage” of those affected by the reductions will be able to find new work in one of those roles, or through jobs being created at more than 100 new stores in the pipeline. “This is a very difficult decision,” Whole Foods co-CEO Walter Robb says in a statement. “We believe this is an important step to evolve Whole Foods Market in a rapidly changing marketplace.”
Whole Foods has had its ups and downs over the last year, but in recent months the downs have predominated. In early July, the New York City Department of Consumer Affairs said it was investigating local Whole Foods stores for systematically overpricing some of its prepackaged products. Per the department’s preliminary findings, 89 percent of packages it tested “did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight.” Whole Foods execs quickly issued a public apology, but it didn’t look good. And when third-quarter earnings rolled around later that month, they disappointed: Profit fell and growth slowed sharply.
These are the latest short-term stumbles in Whole Foods’ bigger, ongoing challenge: reconvincing people that it’s a smart place to shop. The quest to erase “whole paycheck” from the company’s image can seem never-ending, and is far from over despite a “values matter” branding campaign that rolled out almost a year ago now, some cuts to prices, and the announcement this summer of “365 by Whole Foods,” a new, supposedly cheaper store concept designed to appeal to younger shoppers. The common thread running among all these initiatives is the value component—lowering costs, proving that quality can also be accessible. When the likes of Walmart are stocking organics, it’s a shift that’s important and necessary. But affordability also doesn’t come free—and 1,500 jobs will be part of the price.