Dive Brief:
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Kohl’s has downsized its corporate workforce by 10%, according to a statement from Jen Johnson, senior vice president of corporate communications, emailed to Retail Dive.
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The company declined to say how many people are impacted but said it would be fewer than 200 because more than half of the cuts will come from eliminating open roles. The layoffs were first reported by the Wall Street Journal.
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The workforce reduction and recent decision to close 27 stores plus a fulfillment center “are both actions to support our commitments to increase efficiencies and improve profitability in the business for the long-term benefit of our associates and customers,” Johnson said.
Dive Insight:
Kohl’s has taken some tough measures in recent weeks, amid signs that its turnaround is not working.
The department store in November decided to replace CEO Tom Kingsbury with former Michaels chief executive Ashley Buchanan. By the time Buchanan stepped into the role, just two weeks ago, the company had already announced plans to trim its fleet. That ran counter to Kingsbury’s earlier contention that Kohl’s would not only avoid closures but also consider opening more stores.
“While Kohl’s continues to believe in the health and strength of its profitable store base, the stores identified for closure are underperforming and represent approximately 2.3% of the Company’s more than 1,150 locations,” the company said in a financial filing earlier this month.
Also in November, the retailer lowered its outlook and scrambled to walk back some tactics meant to arrest its sales and traffic declines. After being swept away to make room for Sephora shop-in-shops, fine jewelry displays are being returned to 200 stores, for example. Kingsbury also called the move to reduce petite options “a short-sighted decision” and acknowledged that reducing private labels in favor of brand names was a mistake.
It’s not clear how the turnaround shapes up under Buchanan, but, at least in the short term, the department store appears to be focused on the bottom line. The layoffs confirmed Wednesday “support Kohl’s ongoing actions to increase efficiencies and improve profitability for the long-term health and benefit of the business,” said Johnson, who thanked the affected employees “for their dedication to Kohl’s” and said they will receive competitive severance packages.