Saks to Cut Corporate Work Force
New York City Saks Inc. said on Thursday that it plans to reduce 1,100 corporate support and store positions, about 9% of total work force, as part of its effort to weather the deteriorating economic environment. The majority of job cuts will take effect by Jan. 30.
Saks estimates cash severance charges of around $9 million, mostly in the fourth quarter.
It also plans to eliminate merit-based wage increases for 2009 for all staff and suspend company's matching contributions to 401(k) plan for one year.
Saks Inc. also announced on Thursday a series of actions related to expenses, capital spending, and inventory receipts.
“The cost and capital expenditure reductions are structured to minimize the impact on our customers, and the reduction in inventory receipts is reflective of the decrease in consumer demand,” said chairman and CEO Steve Sadove.
He added that the actions are aimed to benefit the future of the company once the economic conditions improve.
“We continue, however, to focus on and make targeted investments in our strategic merchandising, marketing, and selling initiatives,” Sadove said.