It's been no secret that Saks Fifth Avenue has been in trouble lately. Once their merchandise hit 70% off a few weeks ago, we knew they either had to make some changes, or face bankruptcy. Today, WWD reported that Saks took action and laid off 9% of their workforce. CEO Stephen I. Sadove admitted to feeling horrible about the situation, calling the decision, "the toughest thing I’ve ever had to do in my career."
The sad truth is, there really wasn't much else he could do. After endless sales and promotions, business for Saks just wasn't improving. They could no longer afford to keep people on payroll, as the decision to lay off employees will save the company at least $50,000.
Saks has yet to announce to their employees exactly which of them will be keeping their jobs, and plans to break the news within the next several days. Employees of all levels will be affected, although the majority of the cuts will be on the retail sales level, says Sadove.
Saks followed in the footsteps of competitors Neiman Marcus, who laid off approximately 400 jobs earlier this week, and Lord & Taylor who also eliminated 100 jobs recently. As disheartening as this trend is, we can only hope that stores will be able to pull through these bad times without any more major layoffs. But with heavier and heavier promotions, and sales continuing to drop, its sure to be a struggle for stores to stay in the race. Who will be next? Stay tuned.
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