Hudson’s Bay Is Cutting 2,000 Employees by 2018
North America’s oldest department store chain, Hudson’s Bay Co is laying off thousands of employees as it struggles with declining store traffic. The company owns store brands including “Hudson’s Bay,” “Saks Fifth Avenue,” “Lord & Taylor,” “Gilt,” and “Saks Off 5th.”
Hudson’s Bay has announced that the job cuts in North America will total 2,000, of which a significant number will be in the United States. The plan will include layoffs at the corporate head offices and store floors. The downsizing will shave off nearly four percent of the company’s total workforce in the U.S. and Canada. The layoffs are expected to save nearly $350.0 million annually by end of fiscal-year 2018.
Hudson’s Bay CEO Jerry Storch said that the company continues to believe in its brick-and-mortar department store model, especially in the Canadian market. However, the company’s American market is now oversaturated with retailers, thus making it difficult for the company to derive impressive sales numbers in the country.
Storch said that the job cuts will make the company leaner by removing extra layers from its organizational hierarchy. He also said that the company will become better positioned to respond quickly to customer needs in a fast-changing retail environment
The layoffs were announced days after the company declared its lackluster first-quarter results. Hudson’s Bay reported a hefty net loss, which is more than double of what it faced a year ago. The company reported nearly $221.0 million in net losses in the latest quarter of 2017, versus $97.0 million in the same period of 2016. The company also saw its retail sales falling about three percent year-over-year. (Source: Ibid.)
The layoffs follow as the United States witnesses a slow and painful death of shopping malls. Today, an increasing number of Americans are choosing to shop online. Consequently, online retailers like Amazon.com, Inc. have emerged as the biggest threats to the more traditional brick-and-mortar retailers.
In an effort to thwart Amazon’s rising dominance over retail, many retailers are shifting their focus toward digital commerce. American retailers Wal-Mart Stores Inc and Target Corporation are heavily spending on improving their web sites and delivery services.
Storch said that Hudson’s Bay is likewise going to focus on an “all-channel model uniting the Internet with the stores.”
“Hudson’s Bay cutting 2,000 positions in North America, ” Toronto Star, June 8, 2017.