Sara Lee Corp. is laying off 7,000 employees worldwide this year as part of its slimming-down aimed at focusing the conglomerate on food, underwear and household products, a company spokeswoman confirmed Thursday.
These job cuts will affect more than 4 percent of Sara Lee's 154,000 employees in 40 countries. The company's brands include Sara Lee baked goods, Hillshire Farms sausage, Chock full o' Nuts coffee, Hanes underwear, and Playtex bras.
And, J.C. Penney said Thursday that it will close a total of 47 stores affecting 5,300 employees in a restructuring program.
On the Sara Lee cutbacks, company spokeswoman Julie Ketay said specifics of the layoffs have not yet been worked out, but added they will not be centered on any one area.
These layoffs were first disclosed by Sara Lee chief executive C. Steven McMillan in a conference call with securities analysts following the release of the company's quarterly earnings Wednesday, in response to a question about the latest costs associated with the reshaping, Ketay said.
"We will be consolidating some of our operations around the world," she said. "This is a continuation of our reshaping program that we began last May."
The Chicago-based company reported a one percent drop in operating income in the last three months of 2000, blaming a weak euro and a U.S. retail slowdown which prompted it to scale back its outlook for this quarter.
Ketay said she doesn't anticipate more layoffs, but "everything is relative to the business environment."
Sara Lee's job cuts have nothing to do with its announcement on Wednesday that it intends to sell off eight more of its 100-plus businesses, she added. The company has now announced plans to divest 14 companies, representing more than $4.5 billion in revenue, since McMillan took over last year. McMillan said Sara Lee is making "considerable progress" in the reshaping, which will continue.
As for J.C. Penney, the retailer plans to close the majority of the 47 stores in the first half of 2001. 44 are what the company calls under-performing department stores, and three are catalog outlet stores.
Approximately 5,000 store associates will be affected by the closings, although many will be offered positions in other stores, the Plano, Tex.-based company said. Another 300 jobs in the home office and field organization will also be cut.
J.C. Penney says the moves are designed to improve its competitive position and its future financial performance. To pay for the restructuring, the retailer says it will take a charge of 275 (m) million dollars in the current quarter.