According to multiple June 13 reports, Sears announced it would cut 400 jobs, affecting mostly its employees at its corporate headquarters in Hoffman Estates.
The layoffs come as part of an effort to restructure, which is designed to deliver Sears $1.25 billion in annual cost reductions.
On top of the corporate office jobs, positions at field operations will be affected as well due to store closures Sears initiated earlier in June.
In an email to its team, Sears CEO Eddie Lampert, the hedge fund mogul who took over as CEO in 2013, said the company is parting with three senior executives as a result of the cuts, including Stephan H. Zoll, president of online; David Pastrana, president of apparel; and Eric Jaffe, senior vice president of Shop Your Way.
BusinessInsider.com, which obtained the email, reprinted it:
“As you are aware, in February we initiated a strategic restructuring effort to become a more agile and competitive retailer with a clear path toward profitability. As part of our efforts to simplify our organizational structure, today, we are announcing the difficult decision to eliminate approximately 400 full-time positions at our corporate offices and support functions, in addition to certain positions related to our field operations. Accordingly, the following members of the executive leadership team will be departing the company after a brief transition and we wish them well for the future:
· Stephan H. Zoll, President of Online;
· David Pastrana, President of Apparel; and
· Eric Jaffe, Senior Vice President of Shop Your Way
We highly value the support of all our associates and sincerely thank you for your contributions toward our goals. We are deeply committed to treating those impacted by today’s announcement with the utmost dignity and respect and helping them as they manage their career transition. We will be providing compensation severance and transition assistance for those who are eligible. You should know that the company first eliminated open positions and reduced contract employees in order to minimize the impact on full-time employees.
These organizational changes are in addition to the store closures we initiated last week as we continue to right-size our store footprint and inventory needs in preparation for the upcoming holiday season. Together, these restructuring actions will bring us very close to our goal of achieving $1.25 billion in cost savings by the end of the fiscal year – one of the critical steps we are taking to improve our operational performance.
While we will continue to take all necessary steps to return to profitability, we want to emphasize that our integrated retail strategy will remain driven in part by our brick-and-mortar locations and the hard work of our dedicated associates. To be clear, our company is continuing to fight to become a more competitive and agile retailer. If we keep working toward our transformation goal together, we believe we will return our company to long-term profitability while providing real value to our members.
As a leadership team, we are highly aware that it’s difficult to see friends and co-workers leave the company, but we truly believe these difficult steps will help align our cost structure with the size of the company today.
I want to thank all of you for your continued commitment to improving the performance of our company. We will continue to be open and transparent about our restructuring actions and welcome all questions or feedback from you.”
Reaction from anonymous employees was what you would expect at thelayoff.com:
The move comes one week after the retailer revealed it was closing 65 more Sears and Kmart stores, in addition to the 180 closures announced earlier this year. The retailer has been eliminating store-level positions, as well as slashing hours for part-time workers.
Could this be the beginning of the end for the nation’s sixth-largest retail advertiser? Earlier this year, Sears sold its Craftsman tools brand to Stanley Black & Decker, ending decades of exclusivity.
If the troubled retailer finally meets its demise, Havas Chicago, which was named AOR in 2013 and retained the business in a review two years ago, could lose a substantial portion of business. Havas has performed creative duties for Kmart as well as Sears’ Craftsman, Kenmore and Diehard brand group since 2015. Over the holidays, Havas ran a quirky digital campaign for Sears that featured rowdy elves filming video in their basement in a low-budget-style series. Sears formerly worked with McGarry Bowen until early 2015.
Kmart previously worked with FCB Chicago notable commercials like 2013’s “Ship My Pants” and 2015’s “Inactivity Tracker,” both of which were Cannes-winning campaigns. The agency has not worked with Kmart in two years.
Lampert was quoted in the Business Insider article as saying, “We are making progress with the fundamental restructuring of our operations that we initiated in February. This requires us to optimize our store footprint and operate as a leaner and simpler organization.”
The company said it has achieved $1 billion in cost cuts so far this year and is on track to meet its goal of $1.25 billion in savings by the end of the year.
With each store closure, asset sale and layoff, Sears is reducing its imprint on a world with little shortage of retail options — from rival department stores and off-price merchants to general merchandisers and e-commerce retailers.
Follow Colin Costello on Twitter @colincostello10.