UPDATE: Lowe’s Home Improvement is making fundamental changes to how it staffs its stores, with CEO Robert Niblock notifying employees Tuesday that the company will cut some 2,400 jobs across its 285,000-employee nationwide workforce to "better align store staffing with customer demand, shift resources from back-of-the-store activities to customer-facing ones, and enhance our efficiency and productivity," according to an internal memo obtained by the Charlotte Business Journal.
UPDATE: The timing of the layoffs is unclear. Many of the Lowe's workers whose jobs are in the crosshairs will be able to find new roles within the company and others will actually be promoted, according to an earlier report from CNBC and reiterated by the Charlotte Business Journal.
UPDATE: Lowe's also announced that it has promoted Marshall A. Croom, a 20-year company veteran, to the position of chief financial officer, effective March 3. Croom succeeds Robert F. Hull Jr., who announced plans to retire after 17 years with the organization.
The home improvement sector is among the healthiest in retail, and Moody’s Investors Service analysts at year’s end said they expect that to continue. In November, Lowe’s lowered its guidance after Q3 results missed analyst expectations, while larger rival Home Depot maintained its guidance amid stronger same-store sales and traffic. But by other measures, Lowe’s is demonstrating higher productivity, according to Market Realist.
"Home improvement stores such as Home Depot and Lowe's will benefit from the continuing robust recovery of the housing market, and the subsiding deflationary pressure on supermarkets in 2017 should result in the sub-sector outperforming the broader retail industry,” Mickey Chadha, Moody's vice president and senior credit officer, said in a statement emailed to Retail Dive last month.
Lowe’s has been assertive about bringing technology into stores (including robots, as well as virtual and augmented reality), and in November announced a store-within-a-store partnership with retail customer engagement startup b8ta to feature smart home devices and setups. But the retailer may be realizing that well-informed, helpful human store associates remain critical to the customer experience and the bottom line.
"As we look ahead, we’re laser-focused on improving productivity across the organization,” Niblock told analysts in November, according to a transcript from Seeking Alpha. “Our immediate focus is continuing to optimize associate hours to better match customer demand. And while we have made progress in driving productivity in recent years, we are in the process of evaluating meaningful incremental opportunities to drive shareholder value, while continuing to meet customers’ needs in an omnichannel environment.”
Wal-Mart Stores Inc. similarly this summer began eliminating about 7,000 accounting and invoicing positions in an effort to shift employees from the back office into roles that emphasize direct interaction with shoppers. Wal-Mart also brought back its signature door greeters, in part to stave off shoplifting and to be more welcoming to customers.