Off-price retailer TJX cuts workforce as cost saving measure
13 Mar '06
2 min read
Off-price retailer TJX Companies Inc announced that, as a part of its overall strategy to drive profitable growth, it has reduced its workforce by approximately 250 positions, affecting corporate and divisional offices in Massachusetts, Canada and the United Kingdom; approximately 100 of these positions represent the elimination of open positions that will not be filled.
In concert with this move, the Company announced that 12 of its most senior executives, including its Chairman and Acting CEO and its President, have agreed to 10% salary reductions.
The staff reductions and senior executive salary cuts result in a cost reduction of $18 million on an annualized basis.
For fiscal 2007, the Company anticipates a net benefit to pretax income of $8 million, which reflects $15 million in partial year savings from the cost reductions, partially offset by a $7 million one-time charge related to these actions.
The charge will be taken in the first quarter of fiscal 2007, and consists primarily of severance and outplacement services for affected Associates.
The Company is not revising its earnings forecast for fiscal 2007 as these moves were contemplated in its original guidance.
Ben Cammarata, Chairman and Acting Chief Executive Officer of The TJX Companies, Inc stated that operating with a low cost structure has always been key to their ability to offer customers great values.
Upon a careful and comprehensive review of their Headquarters operations, they have identified specific areas where they could provide necessary support and services at reduced costs and improved productivity.
marketing@alchempro.com
