UPDATED: Meijer cuts IT jobs

Dive Brief:

Grocery retailer Meijer has reportedly eliminated 400 in-house IT jobs in the last few months, as the company outsources some jobs and continues to revamp its approach to IT matters, according to a report from Michigan’s WoodTV.com. The retailer didn't provide numbers but confirmed to MLive that cuts have been made.
About 75 IT employees were laid off last week by Meijer, after 325 jobs were eliminated between July and August, according to the report, which attributed the numbers to former employees not named in the report. Meijer did not immediately reply to a request for comment from Retail Dive.
Some of the in-house jobs that were cut are believed to have been outsourced to firms such as IBM and Capgemini, both companies that Meijer has been partnering with in recent months. Meijer is also working with Michigan company DataFactZ for some specialized IT services, the report stated.

Dive Insight:

This news comes almost two months after an initial report surfaced, which suggested that Meijer was close to laying off 46 employees and moving another 25 to Capgemini as it outsourced some IT functions. Now, it appears the number may have been much larger than previously thought, although Meijer has yet to clarify how many in-house IT jobs were eliminated and when.

Meijer CIO Terry Ledbetter has indicated in recent months that the company needs to "change" its legacy IT systems. One approach to doing that is to outsource more IT jobs, functions and projects, and it appears that's what Meijer has in mind.

The sight of retailers cutting large numbers of IT jobs is, sadly for those affected, not much of a surprise at this point. Many retailers are at a stage of revising their IT strategies to eliminate costs, become more nimble in the pursuit and use of cutting-edge technology, help them focus more internally on the IT projects that matter most to them or all of the above.

This particular retailer is also trying to do that at a time when its market is being shaken up by the grocery moves of Amazon, Walmart and others. Meijer has been responding. Earlier this year it announced plans to open a small format store aimed at finding new customers in dense urban areas, and the retailer has also been working on a grocery home delivery program.

Outsourcing IT jobs and running a leaner in-house technology team might be Meijer's way of helping it pursue even more of these efforts.