Sears calls 100 layoffs 'necessary'
Struggling Sears Holdings Corp. said Thursday it has laid off about 100 workers at its Hoffman Estates headquarters, noting that the action doesn't affect special legislation aimed at keeping the headquarters here.
The company, which continues to streamline, notified workers of the layoffs Thursday and targeted a variety of positions. Qualified employees will receive severance packages, said Sears spokesman Chris Brathwaite.
“These decisions are never easy, but they are necessary as part of our efforts to transform the company,” Brathwaite said.
Wall Street analysts weren't surprised by the cuts, considering Sears said it would cut about $200 million in costs in 2012. Even in late December, Sears issued a list of 79 stores set to close, although none were in Illinois. But that list reflected only a portion of the 120 targeted to close after the retail giant suffered losses over the last 4 years.
“One hundred people at the headquarters sounds small,” said Paul Swinand, an analyst with Chicago-based Morningstar.
“It's not the tip of the iceberg in the sense that this is all out there. They've said they needed to cut costs, and the business has struggled since the early stages of the recession, 2007 really,” Swinand said. “I'd call it, the iceberg is floating in front of us. We should be surprised if it continues to melt.”
The bottom line is, Sears' business is tied strongly to the macro environment, such as appliances and housing, Swinand said.
“It may be beginning to turn, but housing still has a lot to work out before it really picks up,” Swinand added.
This round of layoffs at the headquarters “has no impact whatsoever” on legislation passed last year to help keep the headquarters in Hoffman Estates, Chris Brathwaite said.
“We are well above the minimum head-count requirements for both the existing legislation (2,000) expiring in the fall, and the new legislation (4,250 workers), which takes effect in 2013,” Brathwaite explained.
Sears has 6,100 workers at the headquarters, he said.
Brathwaite could not immediately comment on whether more layoffs are planned, especially as Sears plans to continue store closings nationwide.
“It's important to know that under the legislation if we don't meet our obligations we receive no benefits,” Brathwaite said. “We're focused on improving our business and continuing to be a strong, contributing member of the Illinois business community.”
Hoffman Estates Village Manager James Norris said the layoffs are not unusual. The village has “numerous other employers in our boundaries, so it's not unusual at all to see their employment fluctuate in good and bad economic times.”
“While we feel for these 100 individuals involved, as far as the total impact here, it will be very nominal,” Norris said.