Lowe's Lays Off Thousands of Store Workers--Update
August 01 2019 - 2:16PM
Dow Jones News
By Sarah Nassauer
Lowe's Cos. told thousands of store workers this week their
roles were being eliminated and the company was outsourcing tasks
such as assembling barbecue grills and janitorial services.
The home-improvement chain notified maintenance staff and
assemblers that put together grills, wheelbarrows and other
products that they were being laid off, according to employees.
Those roles are being outsourced to third-party companies, the
employees said.
Each of Lowe's roughly 2,000 U.S. stores has several staff
members doing these jobs. Workers are able to reapply for open
positions with the company, the employees said, but aren't
guaranteed the same hourly pay.
Lowe's employed 190,000 full-time and 110,000 part-time workers
as of Feb. 1. Company representatives didn't immediately respond to
requests for comment.
The move is a sign that new CEO Marvin Ellison plans to continue
to cut costs aggressively to improve profits at the chain. Earlier
this year, the company lowered its profit targets for the year.
Traditional retailers are streamlining operations as they face
increasing competition and adapt to consumers making more of their
purchases online. Retailers from Walmart Inc. to the smallest shops
are under pressure as they increase starting hourly wages to
attract workers in a tight U.S. job market. Walmart is testing a
new store management structure that will thin middle-manager ranks.
Lowe's and rival Home Depot Inc. have added self-checkout counters
to free workers for other roles.
Mr. Ellison -- previously a senior executive for Home Depot and
most recently CEO of struggling department store J.C. Penney Co. --
took over at Lowe's last summer and moved quickly to shuffle
executive ranks, often giving top jobs to former colleagues from
Home Depot. He closed 47 less-profitable U.S. stores last year and
shut down Orchard Supply Hardware stores, a small regional hardware
chain that Lowe's acquired five years previously.
In recent years, Lowe's sales growth has lagged behind rival
Home Depot. Investors largely cheered Mr. Ellison's arrival at
Lowe's as an opportunity to boost performance. In the most recent
quarter, Lowe's sales growth outpaced Home Depot for the first time
since 2016. But profit margins declined more than expected and
Lowe's cut its profit expectations for the year, leading to a 12%
drop in the company's stock that day.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
August 01, 2019 14:01 ET (18:01 GMT)
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