Kmart Slashing Overhead

Kmart Corp. (Troy, Mich.) has announced it will eliminate approximately 700 positions in ongoing efforts to trim overhead.

The reductions will include 400 jobs at corporate headquarters and approximately 50 corporate support positions around the country.

The bankrupt retailer said it will also eliminate approximately 100 current open positions, and will begin phasing out some 130 contract positions. It said its stores and distribution centers are not impacted by this cost-reduction initiative.

“These decisions were not made lightly and we are committed to treating our associates with dignity and respect through this difficult process,” said chairman and ceo James Adamson. “All of those affected are eligible for severance packages that include health care subsidies and outplacement services that will assist them with career transition.”

The completion of this initiative will represent a savings of $66 million for the 2002 fiscal year and $130 million annually. “This cost reduction initiative is absolutely critical to our reorganization,” Adamson said. “We had no alternative but to take this action. The company continues to take the steps necessary to return to financial health and regain the confidence of its many stakeholders.”

As part of the reorganization efforts, Adamson said Kmart will continue to explore all possible ways to control and cut costs including eliminating low-priority projects, re-engineering work processes and consolidating workloads. He said this cost-reduction initiative realigns the organization to reflect the company's current business needs, following the completion of 283 store closures. There are currently no plans to close additional Kmart stores.