NEW YORK — Sears, Roebuck & Co. began laying off workers two weeks ago, and the bloodletting could result in more than 1,000 job losses.
One former employee who left the company a week ago said that the layoffs are part of a strategic initiative referred to internally as a “targeted headcount reduction.” According to the source, the cuts will continue through August. He pegged the total reduction in the workforce from both the Hoffman Estates, Ill., headquarters and various distribution centers to be between 1,000 and 1,500 jobs lost by the end of the summer.
A Sears spokesman said, “We’ve said that we are in the process of a top-to-bottom review of operations here. This is not new news regarding any change in [our] employment numbers. This is a continuous process and we have not [determined] any date in which it will be completed.” He declined to provide guidance about projected headcount reductions or what areas are the focus of the push for greater efficiency.
According to the source, every department at headquarters is included in the reduction. “This is a fairly strategic move. Every unit was given a [headcount] number for the reduction,” he said, noting that store personnel isn’t part of this round of job cuts.
The spokesman noted that the “top-to-bottom comprehensive review of operations” is part of a strategy to “focus on strengthening Sears’ profitable retail business and related services while streamlining the organization to provide a better value return to its shareholders.”
He emphasized, “This is part of the company’s goal to match operational costs with its competitors.”
As reported, Sears acknowledged in March that it was cutting jobs in order to boost productivity, but didn’t provide numbers at that time.
Sears decided that same month to sell its credit card unit to more sharply focus on its retail business. Many Wall Street analysts favored the sell-off because it would leave Sears with a balance sheet that gives them a clearer picture of the retailer’s merchandising operation.
An announcement regarding the sale of all or part of the credit card business is expected by the end of the year. Financial sources said it could come even sooner, either shortly before or after the Labor Day weekend. They also said that the top contenders are Citigroup, HSBC Holdings and the financial arm of General Electric Corp.In a related credit matter, a Chicago circuit court judge in Lake County ruled that Kevin Keleghan, who was ousted from his post as head of the credit card operation last fall, can proceed with his defamation lawsuit against Sears chief executive officer Alan Lacy. As reported, the lawsuit was filed after Lacy publicly blamed the former credit chief for nondisclosure of deteriorating credit-card delinquencies.
The Lake County jurist barred from consideration at trial two statements allegedly made by Lacy. He did allow two of Lacy’s statements to proceed to trial: that Keleghan “wasn’t forthcoming about the issues” in the division’s rising delinquent accounts and that he had “become a barrier” to the ceo’s ability to obtain accurate information about the credit card business.
The Sears spokesman said, “We’re happy that the judge has thrown out two of the statements in question and we continue to vigorously defend the remaining counts that will go to trial.”
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