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Ahold-owned Giant Food, which is consolidating many of its operations with the company’s Stop & Shop division in New England, announced yesterday that 650 employees at headquarters will either be laid off or relocated.

The cutbacks won’t affect the company’s 200 stores in the Washington, DC, region. It also is possible, according to Giant spokesman Barry Scher, that some jobs will remain in Landover, Maryland. Giant has said that most of its administrative departments - including information technology, marketing, purchasing and accounting - will move to Quincy. Labor relations, consumer affairs, real estate and store operations departments will remain in Landover.

Giant reportedly will try and place people in new jobs whenever possible, but the reality of the situation is that the headquarters consolidation is taking place to save money – and so some people, mostly in middle management and administrative functions, inevitably will lose their jobs.

As part of the company’s reorganization moves, Bill Holmes, executive vice president of sales at Stop & Shop, has been named executive vice president and general manager of Giant, running the division’s day-to-day operations. He replaces Giant President Richard A. Baird, who will retire in July. Marc E. Smith, the president and chief executive of Stop & Shop, will head the combined companies from Stop & Shop's headquarters in Quincy.
KC's View:
These moves take place in what could be described in the shadow of three near simultaneous occurrences – just completed labor talks that avoided a strike, the need to cut costs to compete with the likes of Wal-Mart, and increased competition coming from new areas entrants such as Wegmans.

We hope, for Giant’s sake, that these decisions pan out. Because when you want to be in touch with your customers and have an intimate understanding of the marketplace, moving administrative functions hundreds of miles away isn’t necessarily the first strategic move that comes to mind.