Sears slashes another 200 corporate jobs
- Sears Holdings laid off 200 corporate employees in June, with 150 of those workers at its Hoffman Estates support center, according to reports from CNBC and the Chicago Tribune, which were confirmed for Retail Dive by a Sears spokesman.
- In a June note to employees emailed to Retail Dive, Sears CEO Eddie Lampert said of the cuts: "As we work to advance our strategic transformation, we all know that we must return the company to profitability in order to retain the confidence of our constituents. This means continuing to look at ways to streamline our operations while staying focused on our Best Members, Best Categories and Best Stores."
- The company let go 220 employees earlier this year, bringing the total number of corporate layoffs to more than 400 thus far in 2018.
Sears over the years has proven adept at finding cost cuts and liquidity apparently hiding under the rug as it moves to stem losses and even post the occasional positive profit.
Various financial moves — including borrowing from Lampert’s hedge fund, selling off major assets like the Craftsman brand (and potentially the Kenmore brand), and trading out debt — have kept Sears out of bankruptcy so far.
In a few short years, the retailer has axed around half its store base. Since 2017 alone, it has laid off hundreds of corporate staff members and closed hundreds of stores. This spring, the retailer and executives said they were closing an additional 100 underperforming locations to focus on Sears' better performers.
Sears itself acknowledges the business risks of those cost cuts. The company in its most recent 10-K told investors of cost-cutting layoffs: "These reductions, as well as employee attrition, could result in the potential loss of specific knowledge relating to our company, operations and industry that could be difficult to replace." Noting that remaining employees take on additional work, Sears added, "The restructuring program and workforce changes may negatively impact communication, morale, management cohesiveness and effective decision-making, which could have an adverse impact on our business operations, customer experience, sales and results of operations."
Causes are always hard to pinpoint in retail outcomes, but there’s no question that Sears’ business has suffered even as it has slowed losses. The retailer’s comparable sales have been falling in double digits for the last several quarters, and have been almost entirely negative (with a couple quarterly exceptions) for the past decade.
There appears to be no end in sight to the job, store and cost cuts. Sears has tried to boost sales through a recently expanded partnership with Amazon, tests of new store models, and by adding mini-Kmarts in Sears stores and constantly tweaking the Shop Your Way loyalty program. For now, though, the company’s sales base just keeps shrinking.
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