Bed Bath & Beyond on Tuesday announced about 2,800 layoffs of employees or 5% of its workforce, "from across its corporate headquarters and retail banner stores, effective immediately." The company employs 55,000, according to its most recent annual report.
The "major realignment of its organizational structure" is expected to yield annual pre-tax cost savings of about $150 million, part of its previously announced savings plan that also entails closing down 200 stores.
Overall the reorganization will save some $250 million to $350 million over the next two or three years "through a robust store optimization project and annual savings from product sourcing through renegotiations with existing vendors," the company reiterated in a press release Tuesday.
Bed Bath & Beyond is on its way to becoming a much smaller retailer.
The layoffs announced Tuesday come after a February announcement of 500 corporate layoffs, about 10% of that cohort, and another in June of hundreds of employees in New Jersey and Florida. But it's not just workers: The company is closing hundreds of stores and selling off some of its businesses, including One Kings Lane and PersonalizationMall.com. Investors have also been pushing for the retailer to go further and also unload Cost Plus World Market and Christmas Tree Shop.
The company says these moves are about more than shrinking and simplifying its operations, although that will save money and provide financial and operational flexibility.
"This action is designed to further reduce layers at the corporate level, significantly reposition field operations to better serve customers in a digital-first shopping environment, as well as realign technology, supply chain and merchandising teams to support strategic growth initiatives," the company said.
Much of the savings will go toward expanding the company's recently instituted curbside pickup and other BOPIS services, launching "an array of new customer-inspired owned brands in 2021" and delivering "an end-to-end transformation" of the supply chain, per the release.
The retailer's idea of developing private labels, announced in January 2019, predates the arrival of Mark Tritton as CEO in November. But his presence could bode well for its effectiveness, considering that Tritton was instrumental in reviving Target's private label assortment as the mass retailer's chief merchandising officer — an effort that analysts and Target executives alike credit for its success in several categories, including consumer products, apparel and Bed Bath & Beyond's core offering of home goods.
Bed Bath & Beyond isn't alone in shrinking its workforce. Retailers so far this year have announced 163,112 job cuts, nearly 200% higher than the 55,167 cuts announced through the same period last year, according to a report earlier this month from outplacement firm Challenger, Gray & Christmas. That's the second-highest total of any industry, behind entertainment and leisure companies, according to that report.