Sears plans to cut payroll by 21,000

January 04, 1991|By Los Angeles Times

Sears, Roebuck & Co. launched one of corporate America's biggest job cutbacks in recent years yesterday, announcing that it will slash about 21,000 office and receiving room positions at its stores across the United States.

Sears, by some measures the nation's biggest merchant, with Baltimore-area stores in White Marsh, Hunt Valley, Columbia, Security Square and Glen Burnie, said in November that beginning this month it would dismiss or reassign thousands of the non-sales employees at its 863 U.S. stores to streamline operations.

The 21,000 hourly and management jobs being eliminated consist of 3,500 full-time and 17,500 part-time positions, nearly 7 percent of the company's retailing work force. Sears' big financial-services subsidiaries, Allstate Insurance and the Dean Witter Reynolds securities company, were not affected.

Gordon L. Jones, a spokesman at Sears' headquarters in Chicago, said the company did not know how many of the 21,000 job cuts would come through dismissals or how many of the affected workers could be transferred into sales jobs or positions that become available at new stores.

Mr. Jones said Sears began interviewing affected workers yesterday to determine the number who are interested in accepting the company's severance package and the number who will seek transfers. Hourly workers who leave the company will receive one week of pay for every year of service, up to a maximum of 26 weeks' pay.

Management employees will get two weeks of pay for every year of service, up to a maximum of 52 weeks' pay.

Sears officials, without giving specifics, said the cuts will help boost the company's sagging profits, which have been hit hard by the overall slowdown in U.S. retailing and Sears' own image problems.

In the third quarter -- despite earlier job cuts and cost-cutting efforts -- the company's profits fell 30 percent, to $179.2 million, on sales that rose 5.9 percent, to $13.96 billion.

Analysts were skeptical. "It is certainly a step in the right direction, but it's not enough," said Kurt Barnard, publisher of the Retail Marketing Report.

Edward Weller, an analyst with Montgomery Securities, said the cutback was a tragedy for the workers involved but long overdue for the company itself.

Mr. Barnard noted that Sears' operating costs, including payroll and administrative expenses, are considered the highest among major U.S. retailers. He also said Sears' key problem is that it has been unable to find a way to bring enough customers back to its stores.

Yesterday, Sears reported that its sales during the crucial retailing month of December were off 0.3 percent from the same month a year earlier at stores open more than one year.

In trading on the New York Stock Exchange, Sears' stock fell 25 cents to close at $25.625.

Dan Lacey, editor of the Workplace Trends newsletter, ranked Sears' job cutback as the third-biggest by a U.S. company in recent years. He said the only bigger retrenchments were a 34,000-job cutback by General Motors last year and AT&T's elimination of 31,590 jobs over the last two years.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.