updated 4/30/2004 11:25:17 AM ET 2004-04-30T15:25:17

Struggling supermarket operator Winn-Dixie Stores Inc. plans to cut 10,000 jobs from its payroll by closing or selling 156 stores and three distribution centers and selling several manufacturing businesses over the next year, the company announced Friday.

The job cuts will reduce its work force by about 10 percent.

The announcement came as the company reported a sharp decline in its third-quarter profit as sales fell 5.5 percent.

But investors pushed its shares up 53 cents, or 7 percent, to $8 in morning trading on the New York Stock Exchange.

The company said it plans to close 45 unprofitable or poorly located stores and put another 111 stores up for sale and close them if it cannot find buyers. Its stores are mostly in the Southeast and Midwest.

In addition, Winn-Dixie said it would exit distribution centers in Sarasota, Fla., Raleigh, N.C., and Louisville, Ky.

It will also try to sell its Dixie Packers, Crackin’ Good Bakery/Snacks, and Montgomery Pizza manufacturing operations and consolidate its Greenville Ice Cream and Miami Dairy operations into its other dairies.

The closings and sales will leave the Jacksonville-based supermarket chain with 922 stores and about 90,000 employees.

The company said it hopes to sell stores rather than close them so that affected employees won’t lose their jobs. Some employees will be given the chance to fill openings at other stores.

“This was a difficult decision, but it is a necessary part of our strategic plan to restore Winn-Dixie to consistent profitability,” said Frank Lazaran, the company’s president and chief executive officer. “We will make every effort to ensure a smooth and fair transition for affected (employees).”

The company reported earnings of $600,000, or break-even on a per-share basis, for the three months ended March 31 compared with $50.6 million, or 36 cents per share, a year ago.

Sales fell for the quarter to $2.67 billion from $2.82 billion a year ago.

For the first three quarters of the fiscal year, the company reported a net loss of $77 million, or 55 cents per share, in contrast to a profit of $176.7 million, or $1.26 a share a year ago. Nine-month sales fell to $8.89 billion from $9.44 billion.

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