Mergers Lead to Layoffs

Sears Holdings' layoffs will likely affect 500 workers at its suburban Chicago headquarters, while May Co. is also preparing workers for pink slips.

NEW YORK — Layoffs at Sears Holdings Corp. are expected to affect at least 500 workers at its headquarters, and May Department Stores is preparing its workers for possible job cuts following its acquisition by Federated Department Stores.

At Hoffman Estates, Ill.-based Sears, notices were sent to the required governmental agencies on March 24. Federal law requires notification when 500 employees are affected, while the state law threshold is lower at 250 employees. The Illinois Department of Commerce and Economic Opportunity last month posted the state notice on its Web site, as reported.

Layoffs at Sears’ headquarters were expected because of the recent $11 billion merger between Kmart Holding Corp. and Sears, Roebuck & Co. State law requires a 60-day notice before a mass layoff announcement.

A spokesman for Sears said the retailer is in the process of determining which employees would be affected. “Sears hopes to notify employees of its exact staffing needs by the end of the month,” he said.

The filing impacts only employees at Sears’ headquarters. Sears’ store associates are not affected. Employees of the former Kmart entity who still work at its old headquarters in Troy, Mich., are not affected by Sears’ filing.

Meanwhile, May is busy preparing its staff for the possibility of layoffs once its merger with Federated is complete.

According to a May spokeswoman, the company sent associates in its May Merchandising Group an e-mail alerting them of what to expect in regard to severance and benefits in the event associates  are not offered ongoing employment at Federated.

She said “all other divisions [within May] have had similar meetings.” The spokeswoman said the preplanning was the “right thing to do” to let employees know their options.

Regarding the headcount in St. Louis, where May has its headquarters, the spokeswoman said there are 800 associates in the May merchandising group. In addition, there are 2,500 associates in the corporate office, which includes departments such as public relations, human resources, accounting, legal, financial and real estate.

Federated expects the deal to close in the third quarter. Approval of the acquisition is subject to regulatory review. No date has been set for shareholders to vote on the deal. Once approved, staffing requirements will be clearer.

This story first appeared in the April 11, 2005 issue of WWD.  Subscribe Today.