ROYAL OAK, MICH. Kmart Corp. said Monday it will eliminate nearly 700 more jobs in another round of cost-cutting as the troubled retailer tries to climb its way out of bankruptcy.
The cuts include 400 employees at Kmart's Troy, Mich., headquarters and 50 jobs that provide corporate support, Kmart chairman and CEO James Adamson said. Kmart also will eliminate 100 open positions and phase out 130 contract positions, he said.
"These decisions were not made lightly, and we are committed to treating our associates with dignity and respect through this difficult process," Adamson said.
"We had no alternative," he said.
The cuts will save $66 million for the 2002 fiscal year and $130 million annually. Adamson said the company expects to pay out about $15 million in severance. The affected employees will be notified this week.
About 3,000 employees work at Kmart headquarters. Monday's announcement follows 23 job cuts made last week there and 35 last month from the discount retailer's accounting division.
Kmart already has closed 283 stores, resulting in 22,000 job losses, since it filed for Chapter 11 bankruptcy protection on Jan. 22 after disappointing holiday sales and a stock dive.
Adamson said Monday that no other stores will close this year.
Last week, Kmart asked the bankruptcy court for permission to increase its line of credit by up to $500 million.
The motion also sought permission to increase the size of a loss the company could report before interest, taxes and depreciation from $100 million to about $400 million.
Kmart operates a distribution center that employs 600 people in Lawrence, in addition to a store on South Iowa Street. This round of cuts will not affect Lawrence employees at either the store or distribution center.