Borders Cuts Corporate Workforce 12%
By Judith Rosen -- Publishers Weekly, 2/19/2009 2:12:00 PM
Borders is continuing to try and get its financials in order; to that end the company has eliminated 136 positions, most of them at company headquarters in Ann Arbor, Mich. This most recent cut comes just two weeks after Borders eliminated several top management jobs as well as a number of employees who held the director title. This week’s reductions, by contrast, affected entry-level to middle-management employees across all departments, and represents 12% of the corporate workforce, but less than 1% of the company’s total workforce.
Borders CEO Ron Marshall called the cuts “one of the necessary steps we must take, along with other non-payroll expense reductions, to help get this company back on track financially. We will continue to move forward with deliberate speed to make the changes required to get Borders back on firm financial footing.”
Just last week Borders got an extension from Pershing Square Capital Management, its largest shareholder, for the repayment of its $42.5 million loan until April 15. It also extended its put option to acquire its Paperchase subsidiary until April 15.
In other news, Borders is making changes to its inventory management system; starting this week it will move to more frequent replenishment order cycles--three times faster than in the past. According to Anne Kubek, executive v-p of marketing and merchandising, this should result in fewer out-of-stocks, faster response to sales trends, more predictable order flow and fewer returns. As part of its quicker reaction to trends and customer demand, Borders will add a new Biography section to all its superstores starting in July.
