Sears Holdings Corp. (NASDAQ:SHLD) is planning to eliminate 400 full-time jobs, according to an announcement from the company. Most of the positions will be eliminated at its Hoffman, Illinois corporate offices and from its support functions. The company said that certain positions at its field operations will also be impacted by restructuring actions.
A Sears spokesman said, “The reductions are taking place across various areas of the company. They represent a mix of positions in various business units and roles across the organization.” Sears said it first eliminated open positions and then reduced contract employees, “in an effort to minimize the impact on full-time employees.”
The company has announced that eligible associates will be provided with severance compensation and transition assistance. Sears said, “While the total number of people who are directly affected represents a small fraction of our total headcount, we are conscious of the impact on individual employees.”
In an internal memo to employees, it was announced that David Pastrana, president of Sears’ apparel division, and Eric Jaffe, senior vice president of Shop Your Way, will be departing the company. Sears announced in a separate 8-K filing with the Securities and Exchange Commission that Stephan Zoll, president of Sears’ online operations, is stepping down from the company, effective June 15.
Sears, once the largest U.S. retailer, has been struggling to turn around its business for years. The company has not reported an annual profit in the past six years. In March, Sears raised doubts about its ability to generate enough money to cover its obligations over the next 12 months. Sears stock has shed more than 41 percent over the past 12 months.
The company’s ongoing restructuring efforts are designed to deliver $1.25 billion in annualized cost reductions. Sears said it remains on track to meet its $1.25 billion target and has made about $1 billion in annualized cost savings to date. The retailer said it will continue to take “all necessary action” to achieve profitability. Sears CEO Eddie Lampert said, “We are making progress with the fundamental restructuring of our operations that we initiated in February.”
It was confirmed last week that Sears was adding 66 additional stores to the list of 180 closures announced earlier this year. The exact locations of the stores being closed haven’t yet been confirmed. The company is also monetizing certain real estate properties that generated over $200 million in proceeds and entering into an agreement with Metropolitan Life Insurance to reduce the company’s pension plan.