Sears cuts pay, pares 600 jobs Office in Bethesda among those closed

February 13, 1992|By Michael Dresser The Chicago Tribune contributed to this article. | Michael Dresser The Chicago Tribune contributed to this article.,Staff Writer

Sears, Roebuck & Co., fighting to stay competitive in an increasingly cutthroat market, told many of its sales people yesterday they would have to take severe cuts in pay and commissions to stay with the company.

The Chicago-based company, whose merchandising group has slipped from first to third among the nation's retailers in recent years, also said it would close 10 regional offices, including one in Bethesda. That move, plus a reduction in district offices from 72 to 46, will cut about 600 jobs, 25 to 30 of them in Bethesda.

Sears also said it would bring salaries and commissions in line with its competition. In many cases, the effect would be to cut sales people's earnings or induce them to accept a voluntary severance package.

Sears said the changes would save about $50 million by 1993. Mary Jean Houde, a Sears spokeswoman, said the cuts were necessary to remain competitive.

Sears' department store operations have come under severe pressure in recent years from aggressive discounters such as Wal-Mart and Kmart.

Since 1990, Sears says, it has eliminated 39,900 jobs and squeezed $750 million in annualized savings from a merchandise group whose work force totaled 408,800 at the end of 1989.

That worked to dramatic effect in the 1991 fourth quarter, when the group's earnings tripled, to $289.1 million.

The planned changes left employees at one Baltimore-area Sears store stunned, angry and bitter. They said that, in some cases, veteran employees were being told they would have to accept changes that would cut their earnings in half or sign up for a severance package. Most of those offered severance packages were full-time workers with more than 10 years' experience, employees said.

The workers did not want to be identified.

The employees said sales associates were told their base salaries were being eliminated and they would have to work on commissions only -- in some cases at lower commission rates.

One salesman of big-ticket items, said his earnings would be cut from more than $50,000 to between $25,000 and $28,000 because of lost base pay and a cut in his commission from 5.2 percent to 4.2 percent.

"If I sold 50 percent more than I sold last year, I would still lose $10,000 in pay," he said. "If I worked a 60-hour week I would still lose money."

He said he was offered a severance package of one week's pay for each of his more than 20 years of service, and extended benefits. "I can't stay," he said. "I can't live."

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