Bed Bath & Beyond, the homegoods store, announced it will be cutting 500 jobs, which represents 10% of its corporate workforce. This is one of many changes that are a part of an overhaul intended to re-invigorate the brand in an increasingly digitized world.
The company employs anywhere between 55,000 and 60,000 people at any given time. Only 3,000 are corporate positions at their New Jersey headquarters. To reduce the head count by 500, the company plans to remove duplicate positions and cut out some mid-level positions of store management. This reduction is estimated to save $85 million each year and hundreds of millions in the long run. The restructuring is projected to cost around $26 million, which will cover the costs of negotiations and severance packages.
Mark Triton, a former Target executive and the new CEO of Bed Bath & Beyond, has been leading the effort to save the company after its swift decline. In the past year, company stock has fallen 35%. Triton in his announcement said, “We do not take this action lightly but, while difficult, these measured and purposeful steps are necessary. This will reset our cost structure, allowing us to re-invest where it matters most to our customers, to re-establish our authority in the home space.”
His other changes to Bed Bath & Beyond include modifications in target markets, store renovations and a new fiscal strategy. First, the company will strengthen its emphasis on baby and beauty products and will enter the Christmas tree market. Second, it has budgeted $400 million for remodeling their physical stores and, third, they will be spending around $600 million to reduce debt and buy back shares. The company will also sell off PersonalizationMall.com to bring in a quick $252 million.
As online retailers led by Amazon rapidly grow, it has been difficult for Bed Bath & Beyond to compete. This restructuring plan indicates that rather than meet competitors on the e-commerce field, they are betting on their bread and butter, the physical store.