Payless Layoffs: Footwear Retailer May Cut More Jobs as Stores Struggle

Payless Layoffs

Payless to Restructure: Retail Store Layoffs Expected

Are more layoffs coming to Payless ShoeSource, Inc.? Having recently emerged from bankruptcy, Payless continues to evaluate its operations and it will, as the company says, take “additional steps.” Employees take this to mean another round of mass layoffs.

The footwear retailer filed for bankruptcy back in April, after online shopping giants like, Inc. (NASDAQ:AMZN) gutted foot traffic in shopping malls, taking a huge bite out sales at traditional shopping mall mainstays like Payless.

The company isn’t saying too much just yet, but the retailer has said that more changes are coming as the discount shoe retailer emerges from bankruptcy protection. Meghan Spreer, a spokesperson for Payless, said, “given the changing retail environment there are additional steps that must be taken to position our business model to create sustainable growth…”

Those steps will most certainly include cost-cutting measures like brick-and-mortar store job cuts. The big question is, how big will the layoffs be? Employees fear that Payless could lay off as much as 40% of its workforce.


When asked if Payless would be announcing mass layoffs this week, Spreer responded cryptically, saying, Payless is evaluating its structure “as part of the ordinary course of business.”

Spreer continued:

 Although Payless emerged from Chapter 11 with a strong foundation, given the changing retail environment there are additional steps that must be taken to position our business model to create sustainable growth, ensuring the customer is at the forefront of everything we do and enabling us to take full advantage of our competitive strengths in North America, online, and around the world.

Payless ShoeSource Filed Bankruptcy in April 2017

In early April, Payless filed for Chapter 11 bankruptcy. Commenting on the bankruptcy proceedings at the time, Payless CEO W. Paul Jones said, “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify.”

Under Chapter 11 protection, Payless shuttered almost 700 stores and laid off thousands of employees. The company also reduced its debt by about $435.0 million, which is approximately half of the company’s estimated debt when it filed for bankruptcy.

Four months after filing for protection, Payless emerged as a rare bankruptcy survivor in today’s retail world. But does the revamped Payless have what it takes to stay competitive? Despite the onslaught from e-commerce giants like Amazon, Payless will continue to focus on brick-and-mortar stores and open additional locations across Latin America and Asia.

Payless plans to invest in improving its operations and further developing its online presence. But will the company actually be able to entice shoppers to come back into its stores? And will Payless be able to differentiate itself from discount department stores like Target Corporation (NYSE:TGT), Wal-Mart Stores Inc (NYSE:WMT), and Kohl’s Corporation (NYSE:KSS)?

The company’s balance sheet has been cleaned up, but U.S. margins are tight and wage growth in the country is virtually non-existent. Americans may be willing to go into debt to pay for utility bills, but the U.S. retail industry is still fraught with serious challenges.

Payless Layoffs in 2017 Add Up to More than 100

Payless and other major retailers continue to face almost insurmountable competition from Amazon and other e-commerce retailers. This might explain why 2017 has been a record year for U.S. retail stores closing, as well as for retail store layoffs.

Payless kicked off 2017 by announcing mass layoffs in Topeka and around the world. In total, 165 employees were given pink slips, with most of the layoffs occurring in the Topeka headquarters, at 110. Spreer said the terminations represented about two percent of the company’s total associate base.

One month before announcing the 110 layoffs, Payless said it was closing 132 stores in Australia and laying off 730 employees.



Payless employees brace for deep layoffs as company evaluates structure,” The Topeka Capital-Journal, November 14, 2017.

Payless ShoeSource is filing for bankruptcy,” CNN, August 4, 2017.

Payless emerges from bankruptcy court protection after closing more than 673 stores,” USA Today, August 10, 2017.

Payless lays off over a hundred associates,” KSNT, January 26, 2017.

Payless Shoes to close in Australia, 730 staff to lose jobs,” ABC News, December 14, 2016.


Categories: Job Cuts, News