One month after cutting 130 technology-related positions, Nordstrom announced today that it will lay off another 350-to-400 employees as the retailer looks to “continually evolve with the expectations of its customers.”
The Seattle-based company said the cuts, which will be completed by the end of July, will affect “corporate center” roles at its headquarters and some regional support teams. The layoffs will save Nordstrom $60 million for fiscal 2016. Update: Nordstrom employs more than 7,000 people at its “corporate center,” which includes some roles outside of Seattle. It employs 70,000 worldwide, including those with part-time roles.
“We will never change our commitment to serving customers, but recognize how they want to be served has been changing at an increasingly rapid pace,” Nordstrom co-president Blake Nordstrom said in a statement. “Meeting our customers’ expectations means we must continually evolve with them. We see opportunities to create a more efficient and agile organization that ensures we’re best positioned to achieve our goals.”
The additional layoffs are another sign of Nordstrom’s effort to keep pace with e-commerce giants, such fellow Seattle company Amazon, which are causing traditional retailers to re-assess their business strategies.
In an internal memo sent to employees, obtained independently by GeekWire, the company said that “our hope is to minimize the impact on current employees, so we’re focusing first on closing unfilled open positions.”
“However, there will be people who have worked hard on behalf of Nordstrom for a number of years whose jobs may be eliminated,” the memo noted.
The layoffs announced today come just a month after Nordstrom confirmed that it slashed 130 tech-related jobs as part of a larger shift in its business plans regarding technology.
A Nordstrom spokesperson told GeekWire today that there are no additional cuts planned for technology-related positions; none of the cuts announced today affect salesfloor staff, either.
The job cuts and restructuring of Nordstrom’s technology team follow what the company indicated during its most recent quarterly earnings call earlier this year. While Nordstrom is seeing increased online sales — e-commerce now represents 20 percent of the retailer’s overall business, compared to eight percent five years ago — company managers said they plan to scale back technology projects during 2016.
Nordstrom plans to spend $300 million on tech and e-commerce this year, which about the same amount as the company spent last year. The difference is that the $300 million spent in 2015 represented a 35-percent increase from the prior year.
Over the past few years, Nordstrom has been rolling out all sorts of e-commerce initiatives, including a new Android app, a text-to-buy feature, curbside pickup for online orders, a way to purchase items through Instagram, and a standalone website for Nordstrom Rack stores. It also acquired Trunk Club in 2014.
Nordstrom’s quarterly net income fell to $180 million for the most recent quarter, or nearly 30 percent below the same period a year ago. Its stock is down 30 percent in the past year, now trading at about $52 per share.
Late last month, the company hired longtime Seattle-based executive Kumar Srinivasan to help plot a new course for the company’s technology division.
Full news release is below.
SEATTLE, Wash., April 18, 2016 /PRNewswire/ — Nordstrom, Inc. (NYSE: JWN) today shared with its employees that in order to continually evolve with the expectations of its customers, ensure it is best positioned to respond to the current business environment, and meet long-term growth plans, the company is making a number of changes to its operating model. The company is expecting that approximately 350 to 400 positions will be reduced through a phased approach. These positions will primarily be in its Corporate Center and regional support teams, and the process should be completed by the end of the second quarter. In an effort to minimize impacts on current employees, the company will first look at options such as closing unfilled open positions. Employees whose roles are eliminated will receive separation pay and benefits. These changes are estimated to generate savings of approximately $60 million in fiscal 2016.
Changes to the operating model are part of the company’s broader strategic plans to strengthen its foundation for future growth and improve productivity and service. The company has previously shared that it is continuing to make fundamental changes to serve customers better by leveraging its enterprise capabilities. Initiatives include a new operating model in its Technology group focused on strengthening its ability to deliver on e-commerce and digital initiatives, and proactively addressing opportunities to improve supply chain and marketing effectiveness.
“We will never change our commitment to serving customers, but recognize how they want to be served has been changing at an increasingly rapid pace,” said Blake Nordstrom, co-president, Nordstrom, Inc. “Meeting our customers’ expectations means we must continually evolve with them. We see opportunities to create a more efficient and agile organization that ensures we’re best positioned to achieve our goals.”
The financial impact of these strategic initiatives has been incorporated in the company’s financial outlook that was provided on February 18, 2016.