Home Depot to cut 7,000 jobs, close Expo chain
CHICAGO – Home Depot Inc. plans to eliminate 7,000 jobs while closing four dozen stores under its smaller home improvement brands as the recession continues to batter the nation's housing market. Its shares climbed more than 5 percent in morning trading.
The nation's biggest home improvement retailer said Monday the cuts will affect about 2 percent of its 300,000 workers and cause the Atlanta-based chain to record a $532 million pretax charge, most of which will be recorded in the fourth quarter.
Most of the cuts affect workers at Home Depot's 34 Expo Design Centers, five YardBIRDS, two Design Centers and HD Bath, a bath remodeling business with seven sites.
Those stores will close in the next two months.
Home Depot said its Expo business, which sells everything from throw pillows and sconces to bathtubs and vanities, hasn't performed well financially, even during the recent housing boom. It said the chain has weakened significantly in the current economic environment.
"Exiting our Expo business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," Chairman and Chief Executive Frank Blake said in a statement. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
The company's core Home Depot stores won't be affected
Home Depot's plans also include 2,000 cuts to non-store jobs, including 500 workers in its corporate headquarters, while freezing the pay of its officers.
Home Depot said it would record an additional $163 million in pretax fourth-quarter charges along with a $55 million post-tax charge related to the 2007 sales of HD Supply.
Meanwhile, the retailer also updated its 2008 guidance, saying it expects sales to fall 8 percent for the year while profit tumbles 24 percent when it releases fourth-quarter and full-year results on Feb. 24. Neither figures take into account the charges announced Monday.
Analysts expect the company to earn 16 cents per share on revenue of $14.8 billion for the fourth quarter.
In 2009, the chain said it expects sluggish sales to continue and plans to reduce capital spending by about $1 billion. It will open 12 stores this year.Home Depot shares climbed $1.16, or 5.3 percent, to $22.88 in early trading Monday