Kohl's to Reduce Corporate Staff by 15% in Cost-Cutting Move
After six months of slumped sales because of the coronavirus pandemic, Kohl's announced this week that it was reducing its corporate workforce by around 15 percent. The department store chain has taken a hit during the pandemic that closed all of its more than 1,100 stores this spring. Net sales were down 32.8 percent in the six months ending Aug. 1, the company reported in its second-quarter filings with the Securities and Exchange Commission. Kohl's said it expects the reduction to save the company $65 million annually. This latest downsizing comes after the retailer announced in February that it would be eliminating roughly 250 corporate positions.
Total Retail's Take: The future viability of department stores, already in a tenuous position at the start of 2020, has been severely impacted by the COVID-19 pandemic. Consider Kohl's primary competitors: J.C. Penney filed for bankruptcy; Macy's announced that it was cutting 4,000 corporate jobs amid declining sales during the pandemic; and, to a lesser extent, Sears is hanging on by a thread, seemingly announcing more store closures on a weekly basis. Kohl's is taking the hard but necessary steps now in the hope that it will set it up for future success. The department store has been aggressive in trying to transform its business — its partnership with Amazon.com to accept the online retailer's returns in its stores is a prime example — and therefore is positioned better than others to emerge from the pandemic stronger.