Hy-Vee announced in an advertisement published in the Des Moines Register Wednesday morning that the West Des Moines-based grocery store chain intends to cut 500 employees from its offices.
In an unsigned, full-page advertorial — an advertisement that imitates the newspaper’s editorial format — the company says up to 500 office employees will be asked to relocate to retail stores across the company’s current eight-state portfolio. The company’s statement says 94% of Hy-Vee’s 93,000 employees are at the retail level.
“According to company leaders there are hundreds of retail management positions open across the company waiting to be filled,” the advertorial said. “Many of Hy-Vee’s corporate employees started their career at the retail store and have the experience required to fill these positions.”
Those employees, the advertorial says, will be offered incentives and moving bonuses to relocate to stores with open retail management positions.
“We currently have approximately 400 store leadership positions open across our eight-state region in addition to other full-time opportunities,” Tina Potthoff, a spokesperson from Hy-Vee, said in an emailed statement.
“Since we are in the midst of these changes, we don’t have specific details on any final numbers of corporate employees who are accepting positions at retail at this time. We should know more after the internal job fair this week.”
Currently, Hy-Vee operates more than 285 stores and is in the process of planning an expansion into Alabama, Kentucky, Tennessee and Indiana. In an email Wednesday, Potthoff said the company is still planning to expand to the southeast but is no longer expecting to open 21 stores by 2025.
The announcement comes a month after Hy-Vee terminated 121 positions across marketing, communications and technology departments at the corporate headquarters in West Des Moines and a technology center in Grimes in March.
More:Hy-Vee CEO says, ‘This office does nothing,’ after laying off more than 100 corporate workers
Company cites ‘economic challenges’
Hy-Vee’s advertisement partially blamed record-high inflation, rising fuel costs and supply-chain disruptions for the company’s restructuring strategy.
“I have great concerns about how the months ahead will unfold for our customers,” Hy-Vee CEO Randy Edeker said in a letter addressed “A message to our customers” published in the Register on Sunday, April 24. “While we haven’t always been known for being the cheapest in town, we’ve always balanced price with quality, selection, convenience and customer service.”
Hy-Vee’s advertorial said cutting Aisles Online at low-performing stores was a cost-saving measure intended to “maximize its efforts” where “demand is highest.” In the last few years, Hy-Vee also reduced store hours away from 24-hour service and “restructured its retail leadership.”
“As the company looks closer at the retail landscape it’s making moves to be as lean as possible and moving many of its leaders into stores to serve its customers,” the advertorial said.
Pausing construction of a warehouse in Cumming
Hy-Vee also announced “several projects” are paused as “construction costs hit record highs.” That includes a massive warehouse and distribution center that was set to be developed in Cumming.
The warehouse, the advertorial says, “will be resumed at a later date and (the company) is evaluating its existing land parcels to determine whether the spaces still align with its growth plans for the future.”
According to Hy-Vee, the facility would have generated around 273 new jobs and would more than double the city’s current taxable property valuation.
Earlier this month, Hy-Vee canceled plans to build several stores in Minnesota, according to reporting from the St. Paul Pioneer Press. The company put its land in West St. Paul, Farmington, Blaine, Maple Grove and Chaska up for sale, according to the Pioneer Press.
Hy-Vee instead plans to build stores that fill more than 150,000 square feet to accommodate new departments and space for Aisles Online, the paper reported.
Earlier in April, Hy-Vee submitted plans to expand its Waukee store with a 30,383- square-foot expansion that includes shoe, sports and clothing stores along with a 14-foot-tall Aisles Online canopy for the new grocery pickup location with four vehicle aisles for customers.
The Sports Shop, shoe retailer DSW and clothing store Joe Fresh are part of the Waukee expansion plans at 1005 E. Hickman Road.
Hannah Rodriguez covers retail for the Register. Reach her at herodriguez@registermedia.com or on Twitter @byherodriguez.