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Home Depot to lay off 7,000, close all Expo stores

ATLANTA — Home Depot said Monday it will cut 7,000 jobs — including 500 at its Atlanta headquarters — and shutter all 34 of its Expo Design Centers.

The company, battling the recession and housing industry collapse, said about 5,000 of the cuts will come from the closings of the Expo stores and another 14 outlets specializing in yard or bath remodeling supplies.

Another 2,000 will come from a restructuring of "store support" functions. Those will include the headquarters cuts.

The cuts amount to a little over 2 percent of the total workforce. The company also said it is freezing the salaries of all corporate officers, although it will continue offering merit raises for other workers and will maintain its 401(k) match.

The retail giant has been slowly trimming staff since January of last year, when it axed 500 headquarters positions.

Some analysts have expected the chain's next move to be closing its remaining non-core stores. Home Depot closed 20 Expo stores in 2005 and stopped expanding the concept.

In addition to the remaining 34 Expo stores, the latest closings include two Design Centers, five Yardbirds locations and seven HD Bath locations. There are five Expo stores in Florida, according to the Web site.

The company has nearly 2,000 of its flagship Home Depot stores in the United States, with more than 300,000 employees. There are 20 stores within 100 miles of the Tampa Bay area. In Monday's announcement the company said it plans to open 12 new retail centers nationally this year.

Under chief executive Frank Blake, who was installed in early 2007, Home Depot has focused hard on rebuilding service at those core retail centers.

But the collapse of the housing market and tight credit has undercut those efforts. In recent quarters, the company has been profitable, yet sales have declined.

Same store sales, an industry measure of the performance of stores open for longer than a year, dipped 8.3 percent in the third quarter. The company's stock also has been on the decline.

In a memo to employees, Blake said, "Our core business is $8 billion smaller than we were just two years ago and we expect additional pressure in 2009. Like every business, we need to keep our support costs in line with our overall business performance.

"It is never good news to announce layoffs. The personal hardships that this will cause for many of our associates make this a very difficult decision. But it is the right and necessary decision for our business. It will make us stronger and better able to compete and serve our customers."

Blake said Expo never did as well as hoped, even during the housing boom when higher-end furnishings and projects were hot.

"Even during the boom years of the housing market, EXPO did not do well financially and isn't expected to anytime soon, despite the best efforts of our associates," he said in the memo. "In fact, we were projecting an $80 million loss for the business in 2009. With big ticket design and decor product demand down substantially, this business just does not make sense to continue. It drains resources away from our core orange box business, and that's not something we should do in this environment."

The company said any Expo projects under way will be completed, while customers will be refunded retainers or supplies expenses for work not yet started.

The Atlanta headquarters cutbacks are the second in a year. Last January the company laid off 500 headquarters workers, leaving about 4,500.

The company early last year also announced it was closing 15 under-performing Home Depot stores and shelving plans for 50 new stores. The company also laid off nearly 1,000 employees in a restructuring of human resources operations.

Home Depot made no cutback announcements in the second half of 2008, as the economy worsened.

Blake has already shed one major non-core unit, the HD Supply business that sold major construction materials to big contractors and governments. Under Blake, Home Depot also closed a landscape supply division and flooring stores.

Florida Expo Design Centers

Five stores will close in the state:

Boynton Beach: 1520 SW 8th Street, Boynton Beach, FL 33426, (561) 742-1400

Davie: 8944 State Rd 84, Davie, FL 33324, (954) 382-2622

Miami: 5737 NW 7th Street, Miami, FL 33126, (305) 267-7922

Naples: 1000 Immokalee Road, Naples, FL 34110, (239) 254-2300

SW Orlando: 4601 Millenia Plaza Way, Orlando, FL 32839, (407) 903-9900

Source: www.expo.com

Home Depot to lay off 7,000, close all Expo stores 01/26/09 [Last modified: Monday, January 26, 2009 11:13am]
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