Sears Canada plans to lay off 624 employees in effort to improve its operations

TORONTO – Sears Canada Inc. (TSX:SCC) has announced a round of layoffs for the second time this month, eliminating 624 workers.

The struggling company said Wednesday the cuts will help improve communication and encourage more consistency within its operations.

Most of the reductions will be in middle management at Sears department stores, affecting an average of five employees per location, Sears Canada said in a release.

The company also said it will rework its regional and head office structure to reflect the latest changes and to align it with the smaller business.

Two weeks ago Sears Canada said about 1,600 positions would be affected as it moved ahead with plans to shutter its three Canadian call centres and reduce staff at its warehouses.

Sears Canada is trying to reduce costs and improve its overall business as part of a three-year turnaround plan. Last year, the company made a similar round of cuts that has lowered its overall employee count to around 20,000 people.

“The changes we are making in stores will not affect the number of front-line associates, and service to our customers will not be impacted,” president and CEO Doug Campbell said in a release.

“Our current structure results in inefficiencies and barriers to effective communication among store associates and the changes we are making are designed to result in better store execution and consistency of presentation and standards.”

Campbell added that the layoffs are part of a broader effort that will allow the company to continue serving customers countrywide.

Sears Canada has been dealing with heavy competition within the retail sector that appeared to intensify over the holiday shopping season.

Earlier this month, Sears Holdings Corp., the department store retailer’s U.S. parent, said sales at its Canadian stores dropped 4.4 per cent between Nov. 3 and Jan. 6.

Sears Canada has made an effort to shrink its operations by selling off leases for some of its most prominent locations and has been more aggressive in cutting the number of employees across its operations, from head office positions to customer service.

The retailer operates 181 corporate stores, 241 Hometown appliance stores, more than 1,400 merchandise pickup locations and 101 travel offices.