Despite priding themselves on the quality of their food and a loyal customer base, Whole Foods has suffered public backlash due to high-priced items and a few recent scandals of overcharging customers. Critics have dubbed the chain “Whole Paycheck” as a result.
Recently, Whole Foods’ co-CEOs John Mackey and Walter Robb announced they will release 1,500 employees over the next two months. The pair stated in an internal memo that the cuts are a result of refocusing their goals, which will now include lowering prices, marketing their value and upgrading their technology.
At the heart of this decision seems to be the desire to improve relationships with current and potential customers. However, this move addresses only the financial aspect of the challenges they will face and may, in fact, create another obstacle on the road to achieving overall success.
Layoffs do little in the way of improving a brand’s reputation. Despite communicating well and making efforts to help the employees affected by the cuts, Whole Foods may be naive to expect this decision will build public trust, especially in this economic climate. They are trimming about 1.6 percent of their workforce, but with a tarnished image and a string of credibility issues, this move is just another reason for consumers to distance themselves from the Whole Foods brand.
Employees are the day-to-day, human connection of a brand to its public. If the true motivation behind their actions is to better position themselves with shoppers, it would be better for the company to cut something else. Why? It won’t matter to shoppers if prices are lower if they don’t feel good about the company.
In fairness, a business does have to be financially stable to succeed. According to Business Insider, Whole Foods’ shares have fallen more than 35 percent this year. It seems likely that Whole Foods’ business model has become ineffective and they are restructuring from a weak position.
SpeakerBox PR suggests that Whole Foods has fallen “victim of their own PR success.” When you look at where the company started — cornering the market on healthy and organic food — and where they are now — laying off employees and fighting to re-establish their brand — it’s hard to deny that claim.
What do you think about how Whole Foods has communicated the elimination of jobs to their employees and the public? Do you think this move will help them grow their customer base in the long run?