Financial Collapse RSS

Dec 14, 2008

Office Depot Close 126 Stores, Eliminate 2,200 Jobs

Office Depot Inc. will shutter almost one in 10 North American stores and slash 2,200 jobs as it seeks to stem red ink.

None of the store closings will be in South Florida.

It's not known how many, if any, of the job cuts are local. However, the plan's estimated $270 million-$300 million price tag includes severance for employees at its new Boca Raton headquarters, as well as stores.

"We are making adjustments in our global workforce, including both corporate and field, as business needs dictate," said spokesman Brian Levine in a prepared statement Wednesday.

The 2,200 job cuts represent just 4.5 percent of Office Depot's global workforce. But they come at a time when major retailers, including Office Depot, have traditionally bulked up staff to handle a seasonal surge in sales. Anemic holiday sales, though, have given few retailers much comfort. Indeed, news of job cuts is increasingly common: In November alone, Florida companies announced 2,034 layoffs. In the first eight days of December, 641 layoff notices were reported to the state.

Office Depot's own announcement coincides with its move from offices in Delray Beach to new $210 million headquarters here in Boca Raton.

The move was cemented after state and county officials agreed in 2006 to give the Fortune 500 company $15 million in tax breaks, training grants and other incentives. The company agreed to add 430 jobs.

Since then, the world's second largest office supplies retailer has been battered, first by the housing market collapse and more recently by the credit crunch. Both hit its core buyers: small and home-based businesses.

In July, the retailer reported a $2 million second quarter loss, which represents a 102 percent drop from the same period last year and the first time in three years it did not ring up a quarterly profit. Moody's Investors Service cut its debt rating to junk status, citing the retailer's large number of stores here and in California, where the housing bust has hit hardest.

In a report out today, Irvine, Calif.-based RealtyTrac says that in November, Florida again had the nation's second-highest number of properties with foreclosure filings.

Source : FloridaTrend
[tags : ]


Related Posts with Thumbnails