Toronto – Loblaw cuts 700 head office jobs

The decision by Loblaw Companies Limited to chop 700 jobs from the payroll in administration and at head office in Brampton on Tuesday was met with mixed reviews from analysts and investors.

Loblaw has been upgrading its supply chain technology and infrastructure and while the job cuts may reflect greater efficiencies, Perry Caicco, managing director, CIBC World Markets, warned investors against applying the savings directly to the company’s bottom line.

“Notwithstanding that these job cuts probably reflect a demand from the parent company to generate some return on the outsized capital spending on systems, it is highly unlikely that these actions will directly boost earnings,” wrote Caicco in a note to investors on Tuesday.

“The recent history of the company suggests that some of these job cuts will be replaced by equally expensive outsourcing, and that the company will struggle to re-assign eliminated roles in a productive fashion. In other words, we believe the risk of poor head office execution and service to stores will be high for at least 12 months.”…

via Loblaw cuts 700 Toronto head office jobs – thestar.com.