Downsizing is on the cards at Dollar General.
The Goodlettsville, Tennessee-based discounter said Tuesday that it’s cutting about 255 positions at its headquarters, effective immediately, as it tries to “proactively improve efficiencies” and reduce expenses.
“Over the last several months, we have taken a hard look at our cost structure and are streamlining our support functions to improve our financial flexibility while positioning us to better serve our customers and to capitalize on long-term growth opportunities,” Todd Vasos, chief executive officer of Dollar General, said in a statement. “This restructuring should allow us to continue strengthening our market leadership position and deliver long-term value for our shareholders.”
The layoffs will cost the company about $7 million in one-time severance-related benefits in the third quarter of fiscal 2015. The restructuring also includes about 115 vacant positions, but employees at the retailer’s 12,198 stores won’t be impacted.
The news comes as Dollar General seeks to cement its position among U.S. discounters after its two rivals, Dollar Tree and Family Dollar, merged earlier this year to create the largest dollar chain in the country with some 13,000 stores.
But Dollar General has fared well thus far. It reported second-quarter net income of $282 million, up from $251 million in the year-ago period, and an increase in same-store sales of 2.8 percent.
The retailer plans to have about 730 new stores by the end of this year, representing a 6 percent growth in total square footage, and intends to add another 7 percent to that in 2016.