Fort Worth, Texas — RadioShack is laying off 280 employees this month, primarily at company headquarters here.
A majority of the pink slips went out yesterday, the company said in a filing with the Securities and Exchange Commission, affecting all of its various support functions.
The move, combined with the elimination of open positions, is expected to save the chain $30 million annually.
RadioShack will take an $8.5 million pretax charge for one-time termination benefits that will be recorded in its just-ended fiscal quarter.
The downsizing is the latest in a series of layoffs, store closings, restructurings and other cost reductions instituted under CEO Julian Day aimed at shoring up the struggling CE chain. Day, a turnaround specialist and cost cutter who was credited with leading Kmart out of bankruptcy, told analysts during a conference call last month — his first since joining RadioShack last July — that the company is beginning to show positive signs of improvement compared with recent trends. However, he cautioned, “a great deal more work needs to be done” this year to improve the company’s financial performance and to lay the groundwork for the “long-term development of the brand.”
In a research note, Goldman Sachs retail analyst Matthew Fassler lauded the ongoing cost cuts and improved business processes, but cautioned that RadioShack still “faces daunting challenges in preserving its rich margin structure as the wireless market matures and it sells more low-margin, commoditized goods.”
According to a report in the Fort Worth Star-Telegram, based on interviews with employees, departments affected by the current cuts include operations, merchandising and product support. Unlike last August's downsizing, when 400 white-collar workers were informed of their termination by e-mail, the latest round of pink slips are being conferred in brief, personal interviews, the employees said.