Sears cuts 250 workers, many from Hoffman Estates headquarters
Sears Holdings Corp., parent of Sears and Kmart stores, said Thursday it has immediately cut 250 workers and will not fill another 150 open positions, after woeful losses in its fourth quarter.
About 200 workers were cut immediately from the Hoffman Estates headquarters and the rest were scattered at corporate support centers in Seattle, Washington; Troy Michigan; San Francisco, California; New York and elsewhere, said Sears spokesman Howard Riefs.
“These decisions are never taken lightly, but they are a necessary part of our efforts to transform the company and return it to profitability,” Riefs said. “We are committed to treating these associates with compassion and respect during this difficult process.”
Also a few weeks ago, Sears said it would close 50 stores, none in the Chicago or suburban region. Additional workers will be cut from those ranks as well. Riefs could not provide a number of workers leaving the stores that close.
The recent cuts come the same day Sears announced it suffered a $580 million fourth-quarter net loss as sales continued to slide. The loss compared with a $159 million net loss reported a year earlier.
The company is led by hedge fund manager Edward Lampert, who has been shrinking the once-mighty retailer as its cash dwindles. He's sold and spun off assets, including some of its best real estate, and invested heavily in Sears's online and rewards programs. But that hasn't halted the decline in sales at stores open at least a year, considered a key gauge of retail performance. The company's cash balances were $238 million at the end of the quarter on Jan. 30, down from $250 million a year earlier.
“They've not maintained relevance with the consumer, who's voting with their feet and shopping elsewhere,” said Matt McGinley, an analyst at Evercore ISI. The means the company will continue burning through cash “at horrendous rates” to fund its operations, he said.
In a letter to shareholders, Lampert said that Sears “needs to accelerate our efforts” to boost performance. “Our transformation efforts continue, albeit impacted by our poor operating results,” he said.
Sears is planning at least $300 million in asset sales in the first half of the fiscal year. It will eliminate as much as $650 million in expenses over the course of the year.
• Bloomberg News contributed to this story.