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Sears Restructuring May Mean More Job Cuts
Dec 15, 2003
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Appliance retailer Sears, Roebuck & Co. (Hoffman Estates, IL, U.S.) has begun an internal review that could result in a reduction of jobs at headquarters for the third time in 3 years, Sears officials confirmed.

In a memo distributed to employees, Sears CEO Alan Lacy said a corporate restructuring is under way to give the department store chain a "more focused and efficient corporate structure."

Sears, which has sold its credit-card operations to focus on its retail business, is under pressure, as sales at its stores have declined. During the holiday season, Sears has been forced to lure shoppers with price reductions, which have reduced profit margins.

Job cuts aren't necessarily the goal of the restructuring, but "it's reasonable to anticipate possible reductions as a result of this project," spokesman Chris Brathwaite said.

"We're in a very competitive market, where highly efficient big-box stores are rewriting the rules of competition," Mr. Brathwaite said.

In November, sales at Sears stores open at least 1 year declined 3.6 percent. Analysts had expected sales to be flat or slightly higher.

Sears now has lowered its sales expectations for the entire fourth quarter. Same-store sales are expected to be flat, or down by a low single-digit percentage, for the fourth quarter.

Sears also completed the sale of its credit card business last month, a move that resulted in the need for fewer workers at its headquarters.

Leading the restructuring review is Thomas C. Gorey, vice president of inventory management and merchandise operations. Mr. Gorey is expected to make his final recommendations to Lacy sometime in January.

The company has 4,800 headquarters workers, 9 percent fewer than the 5,300 it had at the beginning of this year. In early 2002, Sears cut about 1,300 of 7,000 jobs. In July, 1999, former CEO Arthur Martinez ordered a 10-percent headquarters job reduction.

"The impact has yet to be determined," Mr. Brathwaite said. But in a "post-credit environment, we're a smaller new Sears." (Chicago Tribune)

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