|Page (1) of 1 - 02/16/12||email article||print page|
Sears lays off 100 at Illinois headquartersSears lays off 100 at Illinois headquarters, says move does not violate terms of tax credit
CHICAGO (AP) ' Sears laid off 100 workers at its headquarters outside of Chicago on Thursday, two months after the company got a hefty tax credit for dropping a threat to move its headquarters out of state.
Sears Holding Corp. spokesman Chris Brathwaite said the layoffs of "about 100 associates" at its headquarters in Hoffman Estates took effect immediately.
Brathwaite said the job cuts do not violate the terms of a $150 million tax credit for Sears approved by the Illinois legislature in December after the company threatened to move its headquarters out of Illinois.
The Sears spokesman said the headquarters workforce will remain above the job levels required in the legislation even with Thursday's layoffs.
"We are well above the minimum headcount requirements for both the existing legislation expiring in the fall and the new legislation which takes effect in 2013," he said in an email to The Associated Press. "It's important to know that under the legislation if we don't meet our obligations we receive no benefits."
The cuts leave about 6,100 people working at the Hoffman Estates site, he said. The deal with the state requires them to keep 4,250 jobs there.
Gov. Pat Quinn's office said the pain of job losses would have been far worse without the deal to keep Sears in Illinois.
"We're not happy with this news today," said Quinn spokeswoman Brooke Anderson. "We're not happy when any corporation cuts jobs. But the bottom line is that the package protected 6,000 jobs and staved off job losses that would have been much much worse."
Sears, which has roots going back 160 years in Illinois, said last year it was considering leaving, and Ohio worked hard to lure the company its way.
Faced with that and the prospect of also losing CME Group Inc., which operates the Chicago Mercantile Exchange, Quinn signed legislation in December granting both companies hundreds of millions of dollars in tax breaks and incentives. In a parallel step, lawmakers also passed a bill that included tax breaks for individuals, including the working poor.
Even with the extra help, the job cuts were necessary, Brathwaite said.
"These decisions are never easy, but they are necessary as part of our efforts to transform the company," he said.
Sears has struggled recently and has announced plans to close between 100 and 120 of its Sears and Kmart stores to raise cash.
The company had a disastrous holiday shopping season, with revenue at stores open at least a year falling 5.2 percent during the eight weeks that ended Christmas Day. The figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
The company has said that its fourth-quarter adjusted earnings will likely be less than half the $933 million reported for the same quarter last year.
In January, Standard & Poor's downgraded its credit ratings on Sears Holding Corp. two notches, putting them deep into "junk" territory. The ratings agency said the decline in Sears Holding's operating performance accelerated last year and it expects the retailer's operations to remain under pressure this year.
The jobs cut Thursday represented a mix of different positions and came from several departments. Those who are eligible will receive severance, Brathwaite said.
"We're focused on improving our business and continuing to be a strong, contributing member of the Illinois business community," he said.
Related Keywords:Sears-Illinois Layoffs,Corporate offices,Legislation,Government and politics,Corporate news,Business,Government finance,Government business and finance,State governments,Legislature,Financial services,Industries