Kohl’s Corp. is the latest company to announce mass layoffs as the coronavirus pandemic continues to batter retail across the board.
The department store announced today in a filing with the Securities and Exchange Commission that it has cut about 15% of its corporate jobs in an effort to preserve liquidity and align its cost base in response to the COVID-19 health crisis. According to the chain, the reduction is expected to save it roughly $65 million in annual expenses.
What’s more, Kohl’s added that its likely to record pre-tax costs of approximately $23 million — the majority of which will be logged in the third quarter of the 2020 fiscal year.
Seven months ago, the company confirmed that it was eliminating another 250 jobs, as well as announced changes to other positions in its corporate offices, as part of its restructuring efforts. Altogether, the terminations will likely grant it expense savings of more than $100 million on an annualized basis.
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The job cuts announced today come at a challenging time for Kohl’s, which beat second-quarter earnings estimates but still recorded a sharp decline in revenues for the period ended Aug. 1. In mid-August, the Menomonee Falls, Wis.-based business posted an adjusted loss of $39 million, or 25 cents per share, versus the prior year’s profits of $247 million, or $1.55 per share. Revenues also declined 23% to $3.21 billion. Analysts had forecasted a loss of 83 cents per share and sales of $3.09 billion.
However, the retailer touted the performance of its digital business, which improved 58% from the prior year. Kohl’s, which has 1,163 stores across the country, shuttered all of its locations for weeks starting March 20 to comply with government-mandated stay-at-home orders and restrictions on nonessential businesses. Over a 10-week period during the second quarter, it reopened its brick-and-mortar fleet, albeit operating with approximately 25% fewer days than the prior year due to limited hours.
At the end of the three months, the company had $2.43 billion in cash and equivalents, plus $500 million available under its revolving credit facility. It had previously withdrawn its full-year forecast, suspended its share buyback plan and decreased its capital expenditures.
“As we look ahead, we are planning for the crisis to continue to impact our business in the near-term,” CEO Michelle Gass said at the time. “We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share.”