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Follow up: Nordstrom confirms 120 job cuts on tech team as part of change in tech strategy

Retail giant Nordstrom today confirmed that it has made another round of layoffs, impacting an undisclosed number of employees on its technology team.

The latest cuts are in addition to 10 layoffs from the technology team that were confirmed earlier this month. Sources tell GeekWire that this new round of cuts could affect significantly more employees — at least 100 people, by several accounts.

The retailer “has been taking a closer look at our technology team to ensure it is best structured to provide a competitive advantage for Nordstrom,” spokeswoman Tara Darrow said in an e-mail to GeekWire today, confirming that the company has made additional cuts.

screenshot_1368“Two weeks ago we shared our new leadership structure with our team and today we are sharing additional changes in our organization’s restructure with those employees who are directly and indirectly impacted,” Darrow said. She added, “Some roles have changed, while others will no longer be needed to support our future direction. Unfortunately there are some people who no longer have roles with Nordstrom.”

The company isn’t currently sharing specific numbers, she said, because it is still in the process of talking with the affected employees.

Before the rise of Amazon.com, Seattle retail was defined by Nordstrom. As its online rival Amazon made inroads into what was once its exclusive domain with investments in the fashion and apparel business, Nordstrom has responded by making more investments in its online presence over the past few years.

Last year, the company spent a total of $300 million on tech and e-commerce, a 35 percent increase over the year prior. But those investments did not pay off as hoped.

Nordstrom announced in a call with analysts that it does not plan to increase its technology budget for 2016. Though e-commerce now represents 20 percent of the retailer’s overall business, up from 8 percent five years ago, the company will decrease its emphasis on technology projects, Nordstrom CFO Michael Koppel said on the call, due to negative impact on operating margins.

“In technology, we are planning productivity improvements by focusing on fewer, more meaningful projects, such as a scalable merchandising solution that supports seamless integration across multiple channels,” Koppel said.

In February, the retail giant reported that its overall quarterly net income fell to $180 million, or nearly 30 percent below the same period a year ago. Its stock is down about 30 percent in the past year, now trading at about $57 per share.

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