Sears said it will eliminate about 400 corporate positions as part of a $1.25 billion cost-cutting program.
The headcount reduction mostly affects full-time employees at the company’s Hoffman Estates, Ill., headquarters, although some global support positions are also being cut.
In addition, pink slips are also going out to certain field operations personnel, and to workers at the 252 stores the company plans to close this year.
Sears said the layoffs represent “a small fraction” of its total headcount, but has helped it realize nearly $1 billion of the $1.25 billion in annualized savings it hopes to achieve this year. Other cost-saving actions have included store closings; senior management cuts; combining Sears and Kmart operations; and streamlining its pricing, sourcing, supply-chain and inventory-management functions.
“We are making progress with the fundamental restructuring of our operations that we initiated in February,” said chairman/CEO Eddie Lampert. “We remain focused on realigning our business model in an evolving and highly competitive retail environment. This requires us to optimize our store footprint and operate as a leaner and simpler organization.”
Lampert’s retail strategy calls for a greater emphasis on the company’s Shop Your Way loyalty program and web and mobile sales as he reduces brick-and-mortar investment and sub-leases and closes stores.
The retailer, which reported a 20 percent decline in first quarter sales, has also shored up its finances by extending the payback of $400 million in debt, annuitizing more than $500 million in pension obligations and selling off its Craftsman brand to Stanley Black & Decker for about $900 million.
Sears said it will “continue to evaluate strategic options across our portfolio to unlock value from our assets through partnerships, joint ventures or other means,” but observers, including ex-Sears Canada chief Mark Cohen, still believe the iconic company’s days are numbered.