Carrefour Argentina Said to Consider Job Cuts on Weak Recovery
(Bloomberg) -- Carrefour SA is considering offering some workers in Argentina voluntary buyouts as the supermarket chain seeks to return to profit, according to a person with direct knowledge.
The unit has discussed the buyouts alongside a “crisis prevention” application it made to the government, according to the person, who asked not to be named because talks are private and ongoing. No decision has been made yet, the person said.
Carrefour said in a statement on Thursday that it filed the crisis application, which allows it to reduce labor costs, to the Labor Ministry this week. The company’s local press office said it was too soon to discuss voluntary buyouts. Armando Cavalieri, head of the Federation of Commerce and Service Workers, said the union will meet with the company and the government on Monday. The government must approve the crisis application.
Argentina’s second-largest supermarket chain has reported three years of losses because of a tepid economic recovery that has pushed consumers to online retailers and big-box type stores offering deeper discounts. In February, Carrefour’s chief financial officer blamed the “difficult economic situation" in Argentina for operating losses locally. Chile’s Cencosud SA, the largest supermarket operator in Argentina, said weak consumer demand led to a decline in sales last year.
While inflation eased in Argentina to 25 percent last year, consumers have tapered spending, hitting supermarkets hardest. Consumer spending at supermarkets fell 3.1 percent in January from a year earlier in constant pesos. The French chain entered Argentina in 1982 and is the fourth-largest private employer, with about 20,000 employees. The company plans to convert 16 hypermarket stores to the “maxi” model, where consumers can get discounts for larger purchases.
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