Sears cuts pay, 600 jobs, closes offices Bethesda unit shut as part of push to stay competitive.

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

Sears, Roebuck & Co., fighting to stay competitive in an increasingly cutthroat market, told many of its sales people yesterday they must 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 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, both of which have moved ahead in sales.

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

In the 1991 fourth quarter 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, they 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 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.

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