Kroger Is Cutting 3,000 Corporate Jobs. Every Company Is Getting Leaner.

Kroger plans to cut about 3,000 corporate roles over the next three years, according to a memo from CEO Greg Foran shared with Grocery Dive. That's about 37% of its 8,200 corporate employees, per Reuters, and one of the biggest cuts in the company's 143-year history.

To me, this is more proof that organizations are getting leaner. AI is letting leaders do more with less work. I wrote about where this leads in The End of Management.

What Kroger said about the layoffs

Foran took over as CEO in February. In the memo he wrote that the company has "more layers, more handoffs and more overhead than we need," and that it will use technology to cut duplicate work.

He also said where the savings go. "We have the opportunity to make changes that will create broader roles and faster decision making," he wrote. "This lets us move vital resources closer to the customer to lower prices, invest in our associates and create a better shopping experience."

Kroger is under pressure. It lowered its annual sales target and is cutting prices to compete with Walmart and Aldi, Reuters reported. In September it laid out an AI strategy that uses models to manage workflows and power an AI shopping assistant.

Why companies have so many layers

Layers exist to move information. Someone gathers it, someone summarizes it, someone takes it up the chain, and a decision comes back down. Every step adds time.

Peter Drucker saw this coming in 1988. In The Coming of the New Organization, he wrote that whole layers of management "neither make decisions nor lead," and that their main job is to relay information. He predicted companies would need far fewer of them once information moved on its own.

AI is what makes that real. Reports, summaries, status updates and first drafts used to fill the middle of a company. Now a leader can get them in seconds.

AI lets leaders do less busywork

This is the part I keep coming back to. AI isn't only replacing tasks. It's empowering leaders to do less work to get the same answer.

A leader who once needed three people to pull numbers, build a deck and write the update can now ask for it directly. That time goes back to customers, people and decisions. I wrote about how the best CEOs are already working this way in AI-native CEOs.

Bloomberg quoted another line from the memo that says it well: "Simplifying means making faster decisions and deploying more resources where they matter most." Source: Bloomberg.

Kroger isn't the only company getting leaner

Reuters noted that companies across industries are rethinking corporate structures and cutting jobs as they turn to AI to streamline work. Kroger itself cut about 1,000 corporate roles in June of last year. This round is three times larger.

It's the same pattern I see with the founders I back. Small teams now do work that used to take whole departments. Big companies are starting to look more like them.

What leaders should do now

1. Map your layers. Count the steps between a customer problem and the person who can fix it. Each step is a place AI can help.
2. Find the handoffs. Look for work that exists only to pass information along: status reports, summaries, recaps. Those go first.
3. Widen roles before you cut them. Kroger talked about broader roles. Give your best people more scope and better tools.
4. Tell people early. Kroger gave a three-year window. Time and honesty let people plan.
5. Put the savings where customers feel it. Lower prices, better service, more people on the front line.

If you want a quick read on where AI is helping your team and where it isn't, try the AI Check.

If you work in a corporate role

This news is hard if your job sits in the middle of a big company. Be easy on yourself. Most of these changes are about how companies are built, not about how good you are.

The best move is to become the person who uses AI to do the work of a layer. Learn the tools, take on broader work and stay close to customers. I wrote more about this in how to plan five years out when AI changes everything.

Companies will keep getting leaner. The leaders and teams who use AI to spend more time on what matters will be the ones who come out ahead.