Kohl's cuts 15% of corporate workforce due to coronavirus
Menomonee Falls, Wisconsin-based department store chain Kohl’s announced plans to reduce its corporate workforce by 15% on Tuesday in an effort to cut costs during the coronavirus pandemic.
The cuts will affect employees at the company’s Menomonee Falls HQ, as well as at its corporate offices in New York and California. Kohl’s has not disclosed how many positions are being eliminated.
In 2019 the company employed around 122,000 associates across both its retail store and corporate staff.
Through these reductions, which the company expects to cost around $23 million before taxes, Kohl's hopes to save $65 million annually.
The cuts follow on from a smaller workforce reduction carried out by Kohl’s in February, which saw the retailer eliminate around 250 roles as part of its corporate restructuring plan. The company expects that together the two waves of cuts will save it more than $100 million a year.
“We put a great deal of thought into this decision and have offered a competitive severance package and outplacement services to help all affected associates as they transition to their next step,” said Kohl’s SVP of communications Jen Johnson in a statement cited by the Milwaukee Journal Sentinel.
The temporary closures of the more than 1,100 Kohl’s stores due to the Covid-19 pandemic took a heavy toll on the retailer’s financial results in the first six months of the fiscal year. The company reported a 32.8% decline in net sales in the six months ended 1 August.
The workforce cuts announced on Tuesday are part of wider attempts at Kohl’s to limit the damage caused by this dip in revenues. In March, the company said it intended to reduce capital expenditures by around $500 million, while during the temporary store closures, most of the retailer’s store and distribution center employees were furloughed.
Johnson said that Kohl’s will continue to exercise financial discipline through expense and inventory management over the coming months and struck a confident tone concerning the company’s future.
“Through prudent management, disciplined investment in key areas, and smart long-term strategic planning, we are well positioned to capitalize on evolving customer behaviors and the retail industry disruption. The organizational changes we’ve made and keen focus on our strategic business priorities will continue to support our long-term success,” she concluded.
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