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A major player in the U.S. grocery supply chain is delivering difficult news to hundreds of workers as it restructures its logistics network.In a rapidly changing food retail landscape, consumers are also changing what and how they eat, placing greater emphasis on a healthier diet and a visible increase in the consumption of natural and organic foods.According to data from the Organic Trade Association (OTA), sales of organic food products reached $65.4 billion in 2024, up from $38.6 billion in 2012, marking the first increase since its 2020s peak.Fresh fruits and vegetables remain the top category of organically grown products, underscoring continued demand for healthier food options.United Natural Foods Inc. (UNFI), a 50-year-old company and a pioneer in the health food space, has played a key role in supplying this demand. The Rhode Island company is one of the largest grocery distributors in North America and supplies major retailers, including Whole Foods.But even as the organic food market grows, the company is now making major operational changes that will affect 443 workers.Grocery distributor UNFI plans layoffsUnited Natural Foods plans to lay off 443 workers as part of the closure of a distribution facility in Sturtevant, Wis., according to a Worker Adjustment and Retraining Notification (WARN) filing.The job cuts will take place in phases beginning in late June 2026 and continuing through early August, with the layoffs being permanent.More Layoffs:Walgreens widens job cuts amid store closuresUPS clears major legal hurdle amid job cutsLuxury retail giant cuts more than 1,200 jobs after bankruptcy filingThe filing shows that the reductions will impact a wide range of logistics and warehouse positions, including drivers, supervisors, lift operators, and selectors. Some affected employees are represented by General Teamsters Local Union No 200.The layoffs are tied to a broader restructuring of UNFI’s supply chain network. The company plans to shut down the Wisconsin center and shift operations to a larger facility in Joliet, Illinois.UNFI is expanding its operations in Illinois and installing new automation technology to increase capacity and improve efficiency, Grocery Dive reported. 

UNFI’s stock is up 15% year to date.Shutterstock

UNFI rolls out AI-powered supply chainThe restructuring also comes as UNFI continues to modernize its supply chain and improve profitability.During its Q2 2026 earnings call, management said that the company is rolling out an AI-powered supply chain planning platform across its entire network as part of its next-generation logistics strategy.CEO Sandy Douglas pointed out that progress in implementation has helped the company “improve customer service, fill rates, and inventory management,” boosting the company’s free cash flow.The company reported mixed financial results earlier this month, reporting adjusted earnings per share of $0.62, a significant increase from last year’s $0.22.Net sales were around $8 billion in the quarter, down 2.6% year over year. But despite softer sales, the company’s profitability improved significantly. Adjusted EBITDA was up  23% to $179 million, driven by reduced debt and lower depreciation expense.Free cash flow was also up around 25% year over year at $243 million.Douglas noted that the execution of value-creation strategies has lifted profitability and free cash flow ahead of projections, and this will continue into the year.For United Natural Foods, the restructuring comes during a milestone year as the company celebrates 50 years in business and adapts to changing consumer demand and rising costs through AI optimization, network consolidation, and streamlining operations.Related: 96-year-old grocery chain acquires 18 stores from rival