Some of you may recall our earlier coverage of the upcoming layoffs at Sears Co. but for those of you who missed out on that article here is an excerpt:
“As some of you may already know the Sears Company, which owns both Sears and K-mart stores, is in some serious finical trouble. The company was recently downgraded by Standard & Poor’s to a level of credit rating that qualified as junk. The company is expected to show a pitiful fourth quarter earning, one that is actually going to be about, or even less than, half of the numbers that they showed in the same quarter in 2010, according to information released by the company. Even the Christmas shopping season, which is usually a freebie on profits for most retailers did not help the chain to get out of its slump. The company’s pre-holiday shopping revenues were actually down by just over five percent. When you consider that K-marts were open both on Thanksgiving Day and in many locations on Christmas Day itself these losses are actually compounded, as workers who manned the stores had to be paid for days the store would normally be closed.
If that sounds like a company teetering on the brink, and badly in need of a break, then you would be right. Late last year the company used what little pull it still has, jobs, in order to convince its home state to give them a tax credit. The tax credit, which totals about $150 million, was given to Sears in order to keep their corporate headquarters in the state. The company was threatening to move, and take its jobs, out of Illinois and into Ohio. The company took the deal in December, and this week they are announcing layoffs.
Chris Brathwaite, a spokes person for Sears, released a statement announcing that the company was ready to layoff about 100 workers. Interestingly enough, these layoffs are still within the scope of their deal. The company will, after this round of cuts, employ about 6,100 workers. In order to keep their tax credit the company only has to keep 4,250 positions at their headquarters. That means that under the terms of this agreement the company will be able to layoff just under 2,000 workers and still keep the $150 million.”
Well, those layoffs have come to pass and under some very harsh terms. The company laid off about 100 workers last week and they have left immediately. The workers, many of who may have believed their jobs to be secure because of the agreement that the company made with the state government, were dismissed immediately. Currently, there is no information about what kind of severance that the employees may get from the company, though the company has offered severance packages to workers in the past when they were laying off.
In addition more layoffs can be expected in the very near future. The company has already announced that it is set to close between 100 and 120 stores in the near future. Currently the company is not giving out a list of locations at the current moment, though they have said that few of the stores will be in the same state as their headquarters.Sears Layoffs Immediate by Harrison Barnes