Rite Aid shakes the direction, removing about 400 jobs in the United States

(Reuters) – Rite Aid Corp. announced Tuesday that its chairman and chief executive officer would step down as part of a reshaping of his leadership. It would remove about 400 management positions.

Rite Aid, based in Camp Hill, Pennsylvania, said the layoffs would affect more than 20 percent of the company's head office and field positions.

The company expects annual savings of about $ 55 million through the restructuring, of which approximately $ 42 million will be realized during fiscal year 2020.

It also plans to incur a one-time charge of approximately $ 38 million related to the restructuring.

John Standley, CEO since 2010, will remain in office until the appointment of his successor, announced the company.

Darren Karst, Chief Financial Officer and Kermit Crawford, Director of Operations, would also leave the company.

The company has been appointed chief accounting officer, Matt Schroeder, as the new chief financial officer and Bryan Everett, as director of operations. Everett is currently the Director of Operations for Rite Aid Stores.

Almost the entire management team is leaving the company in the hands of Rite Aid veterans who have taken up the challenges and complicated the recruitment of a new CEO, said Ross Muken, an analyst at Evercore ISI.

Rite Aid, which has sold more than 1,900 stores to Walgreens Boots Alliance Inc. in 2017, has lost three of the last four quarters.

The company and American grocer Albertsons Companies Inc. ended a $ 24 billion merger last August after Rite Aid's shareholders opposed the deal.

"Given the high levels of debt and the likely lower profit margin, we think the outlook is rather bleak. We do not see any real long-term scenario in which (the company) plays a significant role in the supply chain (medicines), "said Muken.

Shares of Rite Aid, which closed down about 2% Tuesday, rose about 18% to 80 cents in extended trading.