US supermarket operator Safeway has said it is to cut 940 administrative jobs in a bid to reduce costs as it struggles with falling sales and profits.

Safeway, which has been hit by fierce competition from Wal-Mart, said around half of the job cuts will be at its California and Arizona corporate offices.

“Because of a prolonged economic downturn and a difficult operating environment, we need to lower our costs of doing business,” Safeway chairman, president and chief executive officer Steve Burd was quoted by Reuters as saying.

The California-based grocer said that 252 positions to be axed are vacant posts that will not be filled.