MAIN NEWS HEADLINES
June 5 – 12, 2008 Edition
Borders Eliminates
20 Percent of Work Force
At Ann Arbor Headquarters ANN ARBOR, MICH/6/3/2008–Borders Group Inc.has eliminated 20 percent of its corporate workforce this week, including 156 jobs at its Ann Arbor headquarters, according to The Ann Arbor News. Cuts were made across all corporate departments at headquartesr, but do not affect employees at Borders Books & Music or Waldenbooks.
The staff reductions are part of a $120 million cost cutting plan detailed in an investor confernce call May 28. Borders has been operating at a loss of more than $150 million during hte past two years. The job cuts are aimed at helping the company’s profitability. Borders is also considering selling all or part of its assets.
“While it is always difficult to eliminate jobs because of the impact on employees and their families, this is an important step in our company’s cost reduction initiative that will improve our profitability and put us in a much better position for long-term success,” Borders Chief Executive Officer George Jones said in a statement.
Reporting First Quarter results to investors May 27, Borders showed total consolidated sales first the first fiscal quarter of 2008 (ending May 3) at $784.7 million, down 1.0% over a year ago. At Borders domestic superstores, comparable store sales for the period decreased by 4.1%. Without the impact of music, same-store sales at Borders domestic superstores decreased by 1.7% for the quarter. Within the Waldenbooks Specialty Retail segment, comparable store sales decreased by 0.8% over the same period a year ago. Same-store sales in the International segment increased by 3.1% in the first quarter.
Borders employees whose jobs were cut are being offered transition pay, severance packages, job placement assistance and counseling, the company said.
