Albertsons Merger Threatens 5,750 SoCal Jobs; Newsom Kills Layoff Bill

LOS ANGELES, CA — With the tectonic grocery chain merger between Kroger and Albertsons awaiting FTC approval, the union representing workers is warning that thousands of SoCal jobs are on the line when grocery stores close as a result of the merger.

California Governor Gavin Newsom dealt the grocery workers a major blow over the weekend when he vetoed Senate Bill 725, which would have given workers laid off as a result of a merger or acquisition a week's severance pay for every year of service.

The FTC is expected to decide whether the merger between the region's dominant grocery chains violates antitrust laws early next year. If the $24.6 billion deal is approved, some neighborhood grocery stores will likely close.

"In Los Angeles and Orange Counties, 115 of 159 Albertsons stores are within two miles of a Kroger store and are potential targets of closures by the Federal Trade Commission. This could result in an estimated 5,750 jobs being lost in the Los Angeles region alone," according to the United Food and Commercial Workers Western States Council, the union that represents the workers.

The union organized a rally in Los Angeles in a fruitless effort to get him sign. Senate Bill 725

"A merger between these two companies could result in large scale layoffs for workers and without protections, the loss of this many jobs in one region will have ripple effects through the local economy and further burden an already tattered social safety net," the union said in a prepared statement. "SB 725 is urgently needed. In October 2022, it was announced that Kroger and Albertsons would pursue a $24.6 billion mega-merger, joining together two of the largest grocery chains in the United States. For workers who are already living paycheck to paycheck, the layoffs threatened by this merger, and future mergers in the industry, could be devastating."

Kroger and Albertsons employ more than 700,000 workers nationwide at their manufacturing facilities and 5,000 retail stores. By far, California has more of their stores than any other state with Kroger operating about 233 stores as Ralphs, Food 4 Less and Foods Costores and Albertsons operating approximately 579 stores as Albertsons, Safeway, Vons and Pavilions.

However, a spokesperson for the chains said such closures and layoffs are exaggerated.

No “frontline” employees would be out of work because all stores the companies would be forced to divest would be sold to C&S Wholesale Grocers, which has agreed to maintain store jobs and bargaining agreements and may use the Albertsons name in California, company officials told CalMatters. C&S Wholesale Grocers operates chains such as Piggly Wiggly.

Recent Southern California mergers have led to closures and layoffs, however, because the newcomers quickly folded or declared bankruptcy.

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Grocery workers are little comforted by assurances that the merger won't affect their job security.

“Eight years ago, I experienced first hand the pain of losing my job due to a merger,” said Grace Garcia, a cashier at Vons in Glendale. “I didn’t have a job for over three months, and the uncertainty of not knowing what was going to happen next was very stressful not just on myself but my children too. I did not know how I was going to pay my rent and feed my children as a single mother, a situation that no worker or parent should ever be in. Governor Gavin Newsom must sign SB 725 into law to protect hard working folks like myself so workers can count on a safety net to be able to navigate any financial hardship due to mergers like the one between Albertsons and Kroger.”