Kmart To Cut 680 Jobs19 Aug, 2002 By: Hive News
Kmart Corp. announced a cost reduction initiative today, cutting 680 non-store jobs to reduce costs within the organization in an effort to recover from its chapter 11reorganization.
Completion of the initiative represents a savings of $66 million for the 2002 fiscal year and $130 million annually, a spokesperson said.
The initiative comes on the heels of an announcement last week that Kmart will seek to increase its debtor-in-possession financing to $500 million to get through the holiday retailing season.
"This cost reduction initiative is absolutely critical to our reorganization," said James. B. Adamson, chairman and CEO, Kmart Corp. "We had no alternative but to take this action. The company continues to take the steps necessary to return to financial health and regain the confidence of its many stakeholders."
As part of our reorganization efforts, Adamson said that the Company
Kmart will continue to explore all possible ways to control and cut costs including eliminating low priority projects, reengineering work processes and consolidating workloads, Adamson said, adding the initiative realigns the organization to reflect its business needs following the closure of 283 stores.
The chain will eliminate approximately 400 positions at Kmart's corporate headquarters and approximately 50 positions nationally that provide corporate support, starting today. It also will eliminate approximately 100 open positions and will begin phasing out approximately 130 contract positions. The individuals affected will be notified this week. Kmart stores and distribution centers are not impacted by this cost-reduction initiative.
"These decisions were not made lightly and we are committed to treating our associates with dignity and respect through this difficult process," Adamson said. "All of those affected are eligible for severance packages that include health care subsidies and outplacement services that will assist them with career transition."