Sears cutting 130 jobs
Sears Holdings Corp. cut 130 jobs Thursday as it continues to reduce expenses and streamline operations to keep the struggling retailer afloat.
The layoffs were primarily at its headquarters in Hoffman Estates, said Mayor Bill McLeod, who was informed Thursday by company executives.
"Sears is still one of the largest real estate owners in the country and it has other businesses besides the stores," McLeod said. "I believe they're going to be around for a while."
Sears announced earlier this month that it would continue to restructure to return to profitability. It is targeting at least $1 billion in cost savings this year. As part of the restructuring, Sears said it would eliminate positions in various business units and roles primarily at its headquarters, said Sears spokesman Howard Riefs.
"These actions follow actions that impacted our Kmart and Sears stores and field locations in the past two months," Riefs said. "The company is providing 60 days' notice, and severance and transition assistance will be offered to those who are eligible, and, as always, we are committed to treating these associates with respect and dignity."
Dozens of affected employees and their colleagues also took to online discussion boards to vent their concerns and frustrations with the company and compared notes on the severance package.
Sears Holdings, parent of Sears and Kmart stores, has been losing money because consumers are shopping for deals elsewhere - online and in stores. The last holiday season especially saw losses and the company said it would re-evaluate its stores, properties and workforce.
Last year, Sears closed 68 Kmart and 10 Sears stores nationwide, although none were in the Chicago suburbs. Sears Holdings then was expected to have about 1,500 stores left. It was part of an ongoing mission to return to profitability.
The headquarters will remain above the minimum head count requirement of 4,250 employees under the Illinois EDGE tax break package the company received after it threatened to leave Illinois in 2011, Riefs said.
EDGE, or Economic Development for a Growing Economy, provides tax breaks for companies that reach certain milestones, such as workforce numbers, if they stay in Illinois.
Since then, the nationwide retailer has continued to lose money and has sold off various brands, real estate and trimmed its workforce all while its CEO Edward Lampert invested millions of dollars to keep it afloat.
Last month, Sears agreed to sell its Craftsman tool brand to Stanley Black & Decker Inc. for about $900 million, marking Lampert's move again to prop up the beleaguered retailer with fresh sources of funding. Lampert has spun off Craftsman, Sears Hometown & Outlet business and Lands' End clothing line.
Memo from Sears CEO Edward Lampert
A few excerpts from a letter Sears Chairman and CEO Edward Lampert sent to workers on Thursday morning:
• "This activity is necessary to create a more nimble operating structure capable of driving the company's strategic transformation forward. We highly value all of our associates and do not take these decisions lightly. We are committed to providing resources to those who were impacted to help manage their career transition as appropriate and we wish them well in their future endeavors."
• "I would like to emphasize that your support and contributions are critical to ensure we can drive meaningful change and progress through this restructuring program. We need to continue to take action to adapt to the new realities of the retail industry and become more efficient and more competitive over the long term. This is an important phase in our transformation and all of you will play a role in helping us redefine the way work and as we deliver our best products and services to our Shop Your Way members through the restructuring program.:
• "With your commitment to the company and engagement in these changes, I believe we can significantly improve our operational performance and competitiveness in a difficult retail environment. As a result, we will be able to concentrate our efforts and resources more efficiently to accelerate our strategic transformation and the expansion of Shop Your Way in our members' lives."
• "While some of the incremental actions we will be taking are still in the planning phase, I wanted to update you on the most recent restructuring actions. As we continue to execute all of the various initiatives tied to the program in the weeks and months to come, the leadership team and I are committed to providing regular updates as details become available. We appreciate your continued hard work and patience during this process."