Borders® Group Implements Corporate Job Eliminations as Part of Previously Announced Initiative to Reduce Annual Expenses by $120 Million
ANN ARBOR, Mich.—In its first quarter financial results release last week, Borders Group, Inc. (NYSE: BGP) announced that it is implementing an aggressive plan to reduce annual expenses by $120 million and expects to save half of that amount yet this fiscal year. The expense reduction is part of an overall effort to improve the company’s bottom line that also includes continued progress on improving cash flow, reducing debt and enhancing inventory productivity, as previously disclosed.
As part of this expense reduction program, management reported that the company is today implementing a corporate payroll reduction that includes the elimination of 156 corporate positions spread across virtually all departments of its Ann Arbor headquarters. Employees at the company’s headquarters were informed of the job eliminations this morning.
In addition, Borders Group has eliminated 118 corporate posts that are based outside its headquarters, impacting primarily corporate employees in distribution centers, the field marketing organization, and the corporate sales division. These employees were informed yesterday.
In total, the corporate payroll reduction eliminates approximately 20% of the company’s corporate positions but less than 1% of its total workforce. The job elimination, with the exception of less than a handful of positions, is limited to corporate employees and does not involve store employees at the company’s 547 Borders superstores and 475 Waldenbooks Specialty Retail stores worldwide.
“While it is always difficult to eliminate jobs because of the impact on employees and their families, this is an important step in our company’s cost reduction initiative that will improve our profitability and put us in a much better position for long-term success,” said Borders Group Chief Executive Officer George Jones.
Borders Group is offering employees directly affected by the payroll reduction transition pay, severance packages, job placement assistance, counseling and other services.
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