Whole Foods Markets (WFM)

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Whole Foods recently cut 1,500 jobs to 'invest in technology'

Whole Foods has turned to enterprise software company Infor to build a state of the art IT system that will allow it to better manage its suppliers and save money, the two companies announced on Wednesday.

Last month, Whole Foods said it would be cutting up to 1,500 jobs — or about 1.6% of its workforce to help it save money so it could lower costs and invest in new technology.

Specifically, it said: "As part of its ongoing commitment to lower prices for its customers and invest in technology upgrades while improving its cost structure, Whole Foods Market will reduce a number of positions over the next eight weeks."

This is an interesting feather in the hat for Infor, the company run by former Oracle president Charles Phillips (its CEO) and many other Oracle alums.

As we previously reported, Infor recently poached several executives from Oracle's retail unit to help it land a big new customer and create this new retail product.

In this case, Whole Foods is more than just the first customer. Whole Foods is being described as the product's "co-creator" and "a working lab" for the new system, even though Infor will sell this retail cloud service to other retailers, the companies say in their press release.

A rough year for Whole Foods

A massive new system to help Whole Foods improve its supply chain seems like a smart move.

Whole Foods has been having a rough year.

The company has been trying to change its image as an excessively costly grocery store. That wasn't helped when The New York City Department of Consumer Affairs accused the grocer of systematically overcharging for prepackaged foods by labeling food with incorrect weights.

Shortly after that, Whole Foods' stock was hammered when the company reported disappointing sales and lowered its revenue outlook for 2015. The company's shares have declined more than 35% this year.

Meanwhile, animal rights group PETA has also filed a lawsuit alleging that the grocer's claims of buying meat from humane farms is misleading.

More recently, Whole Foods announced it would stop selling products made by inmates.

Whole Foods is also in the process of launching a new line of budget food stores, known as 365 by Whole Foods Market. It's first planned store has had some controversy too, with some residents protesting it, wanting a regular Whole Foods instead.

All of this means that Whole Foods and newfound partner Infor will be under a microscope as they create this new system. If it does allow Whole Foods to better defend against supply chain accusations while also lowering prices, that's going to be a big win for everyone.

http://finance.yahoo.com/news/whole-foods-recently-cut-1-180736616.html