Aug 26 (Reuters) - Kroger ( KR ) on Tuesday announced

laying off corporate associates, as detailed in a memo, with a

source familiar with the reduction stating that fewer than 1,000

employees will be impacted.

The source added that staff working in stores, manufacturing

facilities or distribution centers were not laid off.

The company, as of February, employed over 409,000 staff,

with most of them working in stores. The grocer had said in June

it would close about 60 underperforming stores over the next 18

months.

"In the past few months, we have all looked for ways to

simplify the organization, shift resources closer to our

customers, and focus on work that creates the most value," said

Kroger's ( KR ) interim CEO Ron Sargent, in a memo seen by Reuters.

Kroger ( KR ) will reinvest savings into other areas, such as

lowering prices, opening new locations and creating store-level

jobs, the memo added.

Bloomberg News had reported layoffs of nearly 1,000

corporate workers earlier on Tuesday, citing the memo from

Sargent.

"With the Kroger-Albertsons merger off the table, Kroger ( KR ) is

moving to reset its cost base and streamline operations," said

Arun Sundaram, analyst at CFRA Research.

"Many decisions were put on hold during the merger process,

so it makes sense that we're seeing more major business

decisions in recent months," he added.

Kroger ( KR ) and Albertsons had proposed a $25 billion merger,

which was blocked by a U.S. judge in December, leading to a

legal battle between the companies.

Kroger ( KR ) had bumped up its annual sales growth forecast after

posting upbeat first-quarter results in June and said it would

invest in lowering prices to attract budget-conscious consumers

amid tariff-induced uncertainty.