Rite Aid Corp. said CEO John Standley is among a number of C-suite executives who are stepping down as part of an organizational shakeup to improve operations and reduce costs. The U.S. drugstore chain said it will cut about 400 full-time corporate positions as part of the restructuring.
COO Kermit Crawford is also leaving and will be replaced by Rite Aid Stores COO Bryan Everett, while CFO Darren Karst will be replaced by Chief Accounting Officer and Treasurer Matt Schroeder. Brian Hoover, group vice president, will succeed Schroeder as chief accounting officer.
The exit of Crawford and Karst will be effective immediately, while Standley will continue as a CEO till a replacement is named, the company said March 12.
Rite Aid said it will consolidate additional senior leadership roles resulting in the elimination of certain positions. It also plans to reduce managerial layers and consolidate roles across the company, cutting more than 20% of the corporate roles, or nearly 400 full-time positions.
Nearly two-thirds of the reductions will take place immediately, while the remaining one-third by the end of fiscal 2020, the company said.
Rite Aid Chairman Bruce Bodaken said the leadership and organizational changes "more closely aligning the structure and leadership" of the company with its present scale.
"These are difficult decisions and we recognize the implications they have for individuals across our organization. However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company," Bodaken said.
"The Board believes that now is the right time to undertake a leadership transition."
The drugstore chain said it expects to save about $55 million annually through restructuring, of which nearly $42 million will be realized within fiscal year 2020. The savings are expected to offset an expected reduction in income related to a sale of its stores under the transition services agreement with Walgreens Boots Alliance Inc.
Rite Aid expects to incur a one-time charge of about $38 million related to the restructuring.