After reporting losses in three out of the last four quarters, Rite Aid Corporation (RAD) revealed on Tuesday that they are laying off 400 full-time positions to reduce costs, as well as changing several executive positions.
Bruce Bodaken, chairman of Rite Aid’s Board of Directors, said the move was is “an important step in positioning Rite Aid for future success.”
“These are difficult decisions and we recognize the implications they have for individuals across our organization,” Bodaken added. “However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company.”
Rite Aid will face another major change in leadership with the announcement of the leave of current chief executive officer John Standley. As the company begins the search process for a new CEO, Standley will stay on until his successor is appointed. Bodaken said Rite Aid is “focused on recruiting a leader that will best position Rite Aid to create long-term value for shareholders.”
“We thank John for his outstanding leadership in guiding the company over the past several years. His leadership and expertise has been critical to ensuring the company’s stability and success through an extremely challenging environment,” Bodaken said.
Rite Aid is also making several other management changes, effective immediately. While some executives are being promoted, other senior roles are being consolidated with the elimination of certain positions.
The elimination of 400 employee positions is expected to take place by the end of fiscal year 2020, which Rite Aid hopes will garner them an annual cost savings of approximately $55 million.