400 positions consolidated, saving a predicted annual $55 million.
Rite Aid Corporation has cut 400 jobs in its corporate offices and shaken up the roster of its C-suite positions. The moves were part of what the company called a leadership transition plan and organizational restructuring.
CEO John Standley will be stepping down, but will remain in the position until Rite Aid finds a replacement.
Bryan Everett is replacing Kermit Crawford as chief operating officer of the company. Matt Schroeder is replacing Darren Karst as chief financial officer. Both Crawford and Karst are leaving Rite Aid. Brian Hoover, group vice president and controller, has been promoted to chief accounting officer. Jocelyn Konrad, BSPharm, executive vice president for pharmacy, has been promoted to executive vice president for pharmacy and retail operations. Rite Aid also says it will consolidate additional senior leadership roles resulting in the elimination of certain positions.
Rite Aid says it will reduce managerial layers and consolidate 20% of all roles across the company, which will eliminate 400 corporate positions. This restructuring is expected to create an annual cost savings of about $55 million, of which about $42 million will occur in fiscal year 2020. There will be a one-time charge of about $38 million related to this restructuring.
“These cost savings will serve to offset an expected reduction in income associated with its diminishing obligations under the Transition Services Agreement with Walgreen Co., which related to the prior sale of stores. Rite Aid expects to incur a one-time restructuring charge of approximately $38 million to achieve the targeted cost savings,” the company says in a statement. Rite Aid sold more than 1,900 of its stores to Walgreens Boots Alliance in 2017.
The news sent Rite Aid’s stock rising about 18% the day of the announcement.