Weeks after it was initially reported that US Foods was looking to streamline its operations by condensing its corporate side, the distributor confirmed moves will be taking place in the next 12 to 18 months.
As we covered previously, the Wall Street Journal reported that US Foods is looking to restructure, which could lead to hundreds of job cuts, including positions in corporate roles like accounting, IT services, and human relations.
"On Oct. 20, we announced plans to improve the efficiency of our corporate support functions," US Foods’ Senior Director of Corporate Communications Debra Ceffalio said in a statement Tuesday, Nov. 8, according to the Chicago Tribune. "This is a continuation of work we did before our IPO to streamline our field operations and something we believe will further support our long-term growth."
An undisclosed number of layoffs will take place in both the Chicago headquarters and Tempe, AZ- based support office, sources told the Chicago Tribune. While Ceffalio did not wish to a specifically planned number of layoffs to be made over the next year and a half, she did comment that combined with "expected attrition," it would affect only a "small percentage" of corporate employees between the two offices.
US Foods also released its third quarter report of fiscal 2016 yesterday, which revealed that it beat expectations. In view of the results, the distributor also raised its expectations for the year.
“Our third quarter results reflected strong performance in many areas, including volume growth and improved profitability,” said President and CEO Pietro Satriano, according to the release. “Top line momentum and margin expansion, despite deflationary pressures, continue to demonstrate that our Great Food. Made Easy. strategy is resonating with independent restaurants and other customers. Our M&A pipeline remains strong, with two new acquisitions closed since the beginning of the fourth quarter.”
The company confirmed that net sales increased 0.8% to $5.8 billion while gross profit was up 2% to $1.0 billion as of the close of the third quarter.