Giant Sears, with sales sagging, to cut 21,000 jobs

January 04, 1991|By Chicago Tribune

CHICAGO -- Sears, Roebuck & Co., adopting a multitude of changes in its stores across the country, will eliminate 21,000 jobs by mid-1991.

The company, continuing an effort to streamline its lumbering retail organization after several years of poor profits, said yesterday it would eliminate 3,500 full-time and 17,500 part-time jobs.

It was not clear, however, how many employees would be laid off since the 21,000 positions to be eliminated refer to jobs rather than employees.

The cuts will save Sears as much as $250 million annually, according to one retail analyst. Sears executives would say only that the anticipated savings were "significant."

Sears detailed its cost-cutting plan as it capped a disappointing holiday selling period with the release of its sales figures for December. Sears reported sales of $3.9 billion for the month, a 1.4 percent increase overall but a 0.3 percent decline when measured only at stores open more than a year, considered a more accurate gauge of performance.

Many of the changes to be implemented at 863 Sears stores in the next few months involve procedures and technology already widely used by other retailers to keep costs low.

"They are way behind the more efficient ones, and they're trying to catch up," said Monroe Greenstein, a retail analyst for Bear Stearns & Co. in New York.

"Sears has to go through a major modernization" to match leaner competitors such as Wal-Mart Stores Inc., he said. Wal-Mart, like the Japanese and Germans after World War II, has profited from its ability to build modern facilities from scratch as its business has boomed.

While Sears spends about 30 cents of every sales dollar to pay administrative and selling costs, Wal-Mart spends about half that.

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.