Hoffman Estates, IL, April 27--Sears has started a major wave of layoffs at its in the wake of last month's merger with Kmart Holding Corp.
The job cuts mark the turning point of what will ultimately be a leaner, lower-cost corporate structure at Sears, which in the past has been accused of having a mind-numbing bureaucracy.
Sears, which has about 4,000 employees at its Hoffman Estates headquarters, is bringing workers who are losing their jobs in large groups to a suburban hotel to receive outplacement services.
That pilgrimage is expected to continue the rest of this week.
Departures of about a dozen high-level executives occurred a few weeks ago and the cuts have been winding their way down now to the lower levels of the company.
"We are offering severance packages and outplacement to headquarters associates who are impacted," spokesman Chris Brathwaite said Tuesday.
He declined to be more specific on the number of jobs being cut. Sears has informed local, state and federal officials that at least 500 workers will be let go as part of a "mass layoff." That's the minimum threshold for alerting the federal government.
But one former Sears' executive said Friday that he hears cuts ranging from several hundred to more than 1,000. Rumored numbers exceed that figure, but fluctuate wildly almost from hour to hour.
"Things are pretty tense at headquarters," said another former Sears' executive with friends still there.
At a local watering hole Tuesday night, two current Sears' employees wondered about their immediate futures. They were told that the layoffs would hit their department on Wednesday.
"What happens tomorrow, we don't know," said one worker, who has been with Sears for five years. He declined to give his name or department.
"I know people (were laid off) today," said the other worker, who has spent 20 years at Sears. "The thought that you could work for a company for a large number of years and not be able to retire with them is disappointing, is regrettable and really a microcosm of what Corporate America has become today."
Sears, now the nation's third-biggest retailer, wants to achieve $300 million in savings by gaining purchasing clout and cutting expenses, including jobs.
"As part of our plan to be a more competitive company with a great retail business, we're building a headquarters structure that will allow us to compete" with the company's most efficient competitors, Brathwaite said.
On the day that the merger was consummated, company officials said they aspired to create a corporate culture similar to that of Internet pioneers Yahoo Inc. and Amazon.com.
One government employee at Hoffman Estates who preferred not to be named said they're not sure whether the job cuts will exceed 500. One state employee said that most companies give numbers that end up being fairly accurate.
The number, however, could be later revised. As of Tuesday, the notice was still at 500.
Sears' stores are not affected by the job cuts.
