The Supply Side briefs: Dollar Tree to cut 370 jobs at Family Dollar corporate center

Dollar Tree, announced a major restructuring following its acquisition of Family Dollar last year. The dollar store chain said Monday (Aug. 8) it would integrate its support functions through a shared services model which will result in the elimination of 370 corporate jobs, including 100 vacant position at is Family Dollar Store support center in Matthews, N.C.

“This announcement represents another step in the process of integrating our two large organizations,” said Bob Sasser, Dollar Tree’s CEO. “Since completing our acquisition a year ago, we have communicated our plans to utilize a shared services model, leveraging our back office functions to support both the Dollar Tree and Family Dollar business segments.”

“We will operate and grow both banners,” Sasser added. “At Dollar Tree, everything is $1 while Family Dollar serves as your neighborhood discount store. To insure that we deliver value and the brand standard, we plan to keep our customer-facing organizations separate and focused on the individual banners. Specifically, store operations and merchandising functions will remain largely unchanged. There are no plans to include these functions in the shared services model.”

The company believes it is well positioned to achieve its goal of $300 million in combined run rate annual synergies by the end of its third year following its July 2015 acquisition. These synergies will be achieved through a combination of savings from sourcing and procurement of products and services; banner optimization; corporate overhead; and optimization of its distribution and logistics networks.

The company expects to incur pre-tax expense of approximately $6 million during fiscal 2016 related to the restructuring for one-time severance-related benefits.

Dollar Tree is scheduled to report its second quarter 2016 financial results prior to the market open on Aug. 25.