Auchan Announces Significant Job Cuts and Store Closures to Revive Business
Auchan, one of France's leading retailers, has unveiled a drastic plan to cut approximately 2,049 jobs as part of a larger strategy to stabilize its operations amid ongoing financial struggles. This announcement, made during a central social and economic committee meeting on November 4, highlights the company's efforts to reorganize its workforce and streamline operations under the leadership of new CEO Guillaume Darrasse.
The job cuts will primarily impact support functions and store operations, with 784 positions affected at the headquarters and 915 positions in stores. Additionally, Auchan will close several hypermarkets in Clermont-Ferrand Nord, Bar-le-Duc, and Woippy, along with a supermarket in Aurillac and six convenience stores, totaling 466 positions. The restructuring also includes the closure of three warehouses that managed Auchan Direct orders, shifting home delivery to drive-through services.
Financial Pressures Drive Auchan's Restructuring Efforts
These measures come in the wake of significant financial losses reported by the parent company, Elo, which recorded a net loss of nearly one billion euros in the first half of the year. Auchan France has particularly struggled, with a 4.7% drop in turnover and a staggering decline in EBITDA by 115 million euros. The competitive landscape, exacerbated by the inflation crisis, has forced Auchan to reevaluate its business model, particularly as larger independents like Leclerc continue to thrive.
Darrasse's appointment as CEO in April coincided with these challenges, and the current restructuring plan represents a critical test for his leadership. The decision to reduce the size of hypermarkets, which were once the brand's hallmark, reflects a broader trend in retail where consumer preferences are shifting away from large-scale shopping experiences. As Auchan navigates these turbulent waters, the focus remains on revitalizing its business while addressing the concerns of its workforce.
